Question 1

A determinant of the price elasticity of supply is the extent to which

Accepted Answer

A)  consumers like the quality of the good. 
B)  the demand for the good is relatively elastic. 
C)  the good has many consumer substitutes. 
D)  production of the good uses commonly available resources. 
A)  consumers like the quality of the good. 
B)  the demand for the good is relatively elastic. 
C)  the good has many consumer substitutes. 
D)  production of the good uses commonly available resources.

Question 2

-Consider the straight-line demand curve illustrated in the figure above. At a price of $6, demand is

Accepted Answer

A)  inelastic. 
B)  elastic. 
C)  unit elastic. 
D)  More information is needed to determine if the demand is elastic, unit elastic, or inelastic. 
A)  inelastic. 
B)  elastic. 
C)  unit elastic. 
D)  More information is needed to determine if the demand is elastic, unit elastic, or inelastic.

Question 3

"The fewer the number of substitutes for a good, the more elastic the demand for that good." Is the previous statement true or false?

Accepted Answer

The statement is False. The greater the

Question 4

"The Department of Agriculture came out today with its prediction for food price next year-4 to 5 percent increases on top of this year's already steep gains… Eggs, dairy products and cereals are up 10 percent... But the USDA says another big part of the American diet has seen only moderate price increases. Beef, poultry and pork will be up only 3 percent this year." If Raul's demand for dairy products is unit elastic, his expenditure on dairy will

Accepted Answer

A)  not change. 
B)  increase less than 10 percent. 
C)  decrease by 10 percent. 
D)  increase by 10 percent. 
A)  not change. 
B)  increase less than 10 percent. 
C)  decrease by 10 percent. 
D)  increase by 10 percent.

Question 5

-The above table gives the demand schedule for Billy Bob's BBQ ribs. The demand for Billy Bob's ribs over the price range of $1 per pound to $3 per pound is

Accepted Answer

A)  perfectly elastic. 
B)  elastic. 
C)  unit elastic. 
D)  inelastic. 
A)  perfectly elastic. 
B)  elastic. 
C)  unit elastic. 
D)  inelastic.

Question 6

Suppose the price elasticity of teenagers' demand for cigarettes is 2.0. If the government imposes a tax on cigarettes that raises the price by 10 percent, by how much will it reduce teenaged smoking?

Accepted Answer

A)  by 5 percent 
B)  by 10 percent 
C)  by 15 percent 
D)  by 20 percent 
A)  by 5 percent 
B)  by 10 percent 
C)  by 15 percent 
D)  by 20 percent

Question 7

-The figure above illustrates a linear demand curve. In the price range from $8 to $6, demand is ________ and in the price range $4 to $2, demand is ________.

Accepted Answer

A)  elastic; elastic 
B)  elastic; inelastic 
C)  inelastic; elastic 
D)  inelastic; inelastic 
A)  elastic; elastic 
B)  elastic; inelastic 
C)  inelastic; elastic 
D)  inelastic; inelastic

Question 8

-The figure illustrates the demand for peanuts. If the price falls from $12 to $9 a bag, total revenue will ________, and if the price rises from $3 to $6 a bag, total revenue will ________.

Accepted Answer

A)  increase; decrease 
B)  increase; increase 
C)  decrease; increase 
D)  decrease; decrease 
A)  increase; decrease 
B)  increase; increase 
C)  decrease; increase 
D)  decrease; decrease

Question 9

Last year, Jack's income was $15,000 and he bought 50 bags of potato chips. This year his income is $18,000 and he buys 55 bags of potato chips. Therefore, Jack's

Accepted Answer

A)  income elasticity of demand for potato chips is 0.52. 
B)  price elasticity of demand for potato chips is 0.52. 
C)  income elasticity of demand for potato chips is 1.66. 
D)  price elasticity of demand for potato chips is 1.66. 
A)  income elasticity of demand for potato chips is 0.52. 
B)  price elasticity of demand for potato chips is 0.52. 
C)  income elasticity of demand for potato chips is 1.66. 
D)  price elasticity of demand for potato chips is 1.66.

Question 10

The demand for ________ is more elastic than the demand for ________.

Accepted Answer

A)  chewing gum; cars 
B)  gasoline; professional services 
C)  all soft beverages; lemonade 
D)  motor vehicles; food 
A)  chewing gum; cars 
B)  gasoline; professional services 
C)  all soft beverages; lemonade 
D)  motor vehicles; food

Question 11

A straight-line demand curve with negative slope intersects the horizontal axis at 100 tons per week. At the midpoint on the demand curve (corresponding to 50 tons per week) the price elasticity of demand is

Accepted Answer

A)  0. 
B)  0.5. 
C)  1.0. 
D)  unknown without more information. 
A)  0. 
B)  0.5. 
C)  1.0. 
D)  unknown without more information.

Question 12

For baseball memorabilia fans, the baseball with which Hank Aaron hit his 735th career home run is perfectly inelastic in supply and in demand.

Accepted Answer

A) True 
 B)False

Question 13

The price elasticity of demand for DVDs is 2. If the price of a DVD increased by 2 percent, the quantity demanded will ________.

Accepted Answer

A)  decrease by 2 percent 
B)  not change 
C)  decrease by 4 percent 
D)  decrease by 1 percent 
A)  decrease by 2 percent 
B)  not change 
C)  decrease by 4 percent 
D)  decrease by 1 percent

Question 14

If the cross elasticity of demand between coffee and tea is positive, an increase in the price of tea will shift the demand curve for

Accepted Answer

A)  tea rightward. 
B)  tea leftward. 
C)  coffee rightward. 
D)  coffee leftward. 
A)  tea rightward. 
B)  tea leftward. 
C)  coffee rightward. 
D)  coffee leftward.

Question 15

Toothpaste and toothbrushes are complements, so the ________ elasticity of demand is ________.

Accepted Answer

A)  cross; positive 
B)  income; negative 
C)  cross; negative 
D)  income; positive 
A)  cross; positive 
B)  income; negative 
C)  cross; negative 
D)  income; positive

Question 16

If a 10 percent increase in income results in an 8 percent increase in the quantity demanded of a good, the income elasticity of demand equals ________ and the good is ________ good.

Accepted Answer

A)  0.80; an inferior 
B)  1.2; a normal 
C)  0.80; a normal 
D)  -1.2; an inferior 
A)  0.80; an inferior 
B)  1.2; a normal 
C)  0.80; a normal 
D)  -1.2; an inferior

Question 17

In 2012, Canadian farmers did not suffer from drought conditions that affected the United States, but they did enjoy the higher corn prices. Canadian farmers reacted to the higher price by planting more corn. Suppose that the price of corn increased by 30 percent and the Canadian farmers increased the quantity of corn they supply by 20 percent. The supply of corn is

Accepted Answer

A)  perfectly inelastic. 
B)  unit elastic. 
C)  elastic. 
D)  inelastic. 
A)  perfectly inelastic. 
B)  unit elastic. 
C)  elastic. 
D)  inelastic.

Question 18

Which of the following goods has a perfectly inelastic supply?

Accepted Answer

A)  insulin 
B)  Diet Pepsi 
C)  the original portrait of "Whistler's Mother" 
D)  compact discs by Bush 
A)  insulin 
B)  Diet Pepsi 
C)  the original portrait of "Whistler's Mother" 
D)  compact discs by Bush

Question 19

-The table above gives Sharon's demand for ground beef at two different income levels. Use the midpoint method in this problem.
a) What is the percentage change in Sharon's income?
b) What is the percentage change in the quantity demanded?
c) What is Sharon's income elasticity of demand for ground beef?
d) Is ground beef a normal or an inferior good for Sharon?

Accepted Answer

a) The percentage change in Sharon's inc

Question 20

Fred's income has just risen from $940 per week to $1,060 per week. As a result, he decides to purchase 9 percent more steak per week. The income elasticity of Fred's demand for steak is

Accepted Answer

A)  0.75. 
B)  0.90. 
C)  1.00. 
D)  1.33. 
A)  0.75. 
B)  0.90. 
C)  1.00. 
D)  1.33.

A determinant of the price elasticity of supply is the extent to which

-Consider the straight-line demand curve illustrated in the figure above. At a price of $6, demand is

"The fewer the number of substitutes for a good, the more elastic the demand for that good." Is the previous statement true or false?

-The above table gives the demand schedule for Billy Bob's BBQ ribs. The demand for Billy Bob's ribs over the price range of $1 per pound to $3 per pound is

Suppose the price elasticity of teenagers' demand for cigarettes is 2.0. If the government imposes a tax on cigarettes that raises the price by 10 percent, by how much will it reduce teenaged smoking?

-The figure above illustrates a linear demand curve. In the price range from $8 to $6, demand is and in the price range $4 to $2, demand is .

-The figure illustrates the demand for peanuts. If the price falls from $12 to $9 a bag, total revenue will , and if the price rises from $3 to $6 a bag, total revenue will .

Last year, Jack's income was $15,000 and he bought 50 bags of potato chips. This year his income is $18,000 and he buys 55 bags of potato chips. Therefore, Jack's

The demand for is more elastic than the demand for .

A straight-line demand curve with negative slope intersects the horizontal axis at 100 tons per week. At the midpoint on the demand curve (corresponding to 50 tons per week) the price elasticity of demand is

For baseball memorabilia fans, the baseball with which Hank Aaron hit his 735th career home run is perfectly inelastic in supply and in demand.

The price elasticity of demand for DVDs is 2. If the price of a DVD increased by 2 percent, the quantity demanded will ________.

If the cross elasticity of demand between coffee and tea is positive, an increase in the price of tea will shift the demand curve for

Toothpaste and toothbrushes are complements, so the elasticity of demand is .

If a 10 percent increase in income results in an 8 percent increase in the quantity demanded of a good, the income elasticity of demand equals and the good is good.

Which of the following goods has a perfectly inelastic supply?

Fred's income has just risen from $940 per week to $1,060 per week. As a result, he decides to purchase 9 percent more steak per week. The income elasticity of Fred's demand for steak is

What Is Economics

The Economic Problem

Demand and Supply

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 4: Elasticity

A determinant of the price elasticity of supply is the extent to which

-Consider the straight-line demand curve illustrated in the figure above. At a price of $6, demand is

"The fewer the number of substitutes for a good, the more elastic the demand for that good." Is the previous statement true or false?

-The above table gives the demand schedule for Billy Bob's BBQ ribs. The demand for Billy Bob's ribs over the price range of $1 per pound to $3 per pound is

Suppose the price elasticity of teenagers' demand for cigarettes is 2.0. If the government imposes a tax on cigarettes that raises the price by 10 percent, by how much will it reduce teenaged smoking?

-The figure above illustrates a linear demand curve. In the price range from $8 to $6, demand is ________ and in the price range $4 to $2, demand is ________.

-The figure illustrates the demand for peanuts. If the price falls from $12 to $9 a bag, total revenue will ________, and if the price rises from $3 to $6 a bag, total revenue will ________.

Last year, Jack's income was $15,000 and he bought 50 bags of potato chips. This year his income is $18,000 and he buys 55 bags of potato chips. Therefore, Jack's

The demand for ________ is more elastic than the demand for ________.

A straight-line demand curve with negative slope intersects the horizontal axis at 100 tons per week. At the midpoint on the demand curve (corresponding to 50 tons per week) the price elasticity of demand is

For baseball memorabilia fans, the baseball with which Hank Aaron hit his 735th career home run is perfectly inelastic in supply and in demand.

The price elasticity of demand for DVDs is 2. If the price of a DVD increased by 2 percent, the quantity demanded will ________.

If the cross elasticity of demand between coffee and tea is positive, an increase in the price of tea will shift the demand curve for

Toothpaste and toothbrushes are complements, so the ________ elasticity of demand is ________.

If a 10 percent increase in income results in an 8 percent increase in the quantity demanded of a good, the income elasticity of demand equals ________ and the good is ________ good.

Which of the following goods has a perfectly inelastic supply?

Fred's income has just risen from $940 per week to $1,060 per week. As a result, he decides to purchase 9 percent more steak per week. The income elasticity of Fred's demand for steak is

What Is Economics

The Economic Problem

Demand and Supply

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

-The figure above illustrates a linear demand curve. In the price range from $8 to $6, demand is and in the price range $4 to $2, demand is .

-The figure illustrates the demand for peanuts. If the price falls from $12 to $9 a bag, total revenue will , and if the price rises from $3 to $6 a bag, total revenue will .

The demand for is more elastic than the demand for .

Toothpaste and toothbrushes are complements, so the elasticity of demand is .

If a 10 percent increase in income results in an 8 percent increase in the quantity demanded of a good, the income elasticity of demand equals and the good is good.