Question 1

A fall in the price of cabbage from $10.50 to $9.50 per bushel increases the quantity demanded from 18,800 to 21,200 bushels. The price elasticity of demand is

Accepted Answer

A)  0.80. 
B)  1.20. 
C)  1.25. 
D)  8.00. 
A)  0.80. 
B)  1.20. 
C)  1.25. 
D)  8.00.

Question 2

Redbox rents DVDs for $1 per day via self-service kiosks located across the United States. In 2007, each kiosk averaged about 50 rentals per day. Suppose Redbox increases their daily price to $1.50. What is the price elasticity of demand if rentals decrease by 20 per day?

Accepted Answer

A)  1.25 
B)  1.33 
C)  1 
D)  0.8 
A)  1.25 
B)  1.33 
C)  1 
D)  0.8

Question 3

What factors determine the magnitude of the price elasticity of demand?

Accepted Answer

There factors determine the magnitude of

Question 4

-The table above gives the demand schedule for peas. Between point C and point D, the price elasticity of demand is

Accepted Answer

A)  elastic. 
B)  unit elastic. 
C)  0.75. 
D)  3.00. 
A)  elastic. 
B)  unit elastic. 
C)  0.75. 
D)  3.00.

Question 5

The elasticity of supply for paintings by Monet is

Accepted Answer

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

Question 6

Freezing temperatures in California have sharply reduced the supply of oranges in the U.S. You predict that the price of oranges will ________, and the more elastic the demand for oranges, the ________ will be the effect on the price.

Accepted Answer

A)  fall; smaller 
B)  fall; greater 
C)  rise; smaller 
D)  rise; greater 
A)  fall; smaller 
B)  fall; greater 
C)  rise; smaller 
D)  rise; greater

Question 7

The price elasticity of demand is always positive, as is the price elasticity of supply. Is the cross elasticity of demand always positive? Explain your answer.

Accepted Answer

No, the cross elasticity of demand is no

Question 8

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 9

Using average price and average quantity, calculate the price elasticity of demand if a price rise from $8 to $10 and decreases the quantity demanded from 20 units to 15 units. The price elasticity of demand equals

Accepted Answer

A)  2.5. 
B)  1.29. 
C)  0.78. 
D)  0.06 
A)  2.5. 
B)  1.29. 
C)  0.78. 
D)  0.06

Question 10

The price of a bus ride decreases, and the total revenue of the bus company decreases. The demand for bus rides is ________.

Accepted Answer

A)  perfectly elastic 
B)  inelastic 
C)  unit elastic 
D)  elastic but not necessarily perfectly elastic 
A)  perfectly elastic 
B)  inelastic 
C)  unit elastic 
D)  elastic but not necessarily perfectly elastic

Question 11

The demand for a good is more price elastic

Accepted Answer

A)  if closer substitutes are available. 
B)  if the good is a necessity rather than a luxury. 
C)  if the share of the good in the average consumer's budget is smaller. 
D)  in the short run than in the long run. 
A)  if closer substitutes are available. 
B)  if the good is a necessity rather than a luxury. 
C)  if the share of the good in the average consumer's budget is smaller. 
D)  in the short run than in the long run.

Question 12

Which of the following leads a good to have a high elasticity of supply? I. The good must be produced using unique resources.
II) The good is produced using commonly available resources.

Accepted Answer

A)  I only 
B)  II only 
C)  I and II 
D)  neither I nor II 
A)  I only 
B)  II only 
C)  I and II 
D)  neither I nor II

Question 13

-The increase in the demand for widgets, shown in the figure above, is the result of a decrease in the price of McBoover devices from $11 to $9. Therefore, the cross-price elasticity for these two products is

Accepted Answer

A)  -2.0. 
B)  -0.5. 
C)  0.5. 
D)  2.0. 
A)  -2.0. 
B)  -0.5. 
C)  0.5. 
D)  2.0.

Question 14

-The figure illustrates the demand for eggs. At what price will egg sellers maximize their total revenue?

Accepted Answer

A)  above $0.75 a dozen 
B)  $0.75 a dozen 
C)  less than $0.75 a dozen 
D)  $1.50 a dozen 
A)  above $0.75 a dozen 
B)  $0.75 a dozen 
C)  less than $0.75 a dozen 
D)  $1.50 a dozen

Question 15

In the nation of Transporta, the income elasticity of demand for used cars is -2.66. So when incomes in this nation increase by 10 percent

Accepted Answer

A)  the quantity of used cars demanded will increase by 26.6 percent. 
B)  used cars will be normal goods. 
C)  the quantity of used cars demanded will decrease by 26.6 percent. 
D)  the demand curve for used cars will shift rightward. 
A)  the quantity of used cars demanded will increase by 26.6 percent. 
B)  used cars will be normal goods. 
C)  the quantity of used cars demanded will decrease by 26.6 percent. 
D)  the demand curve for used cars will shift rightward.

Question 16

When the percentage change in quantity demanded is less than the percentage change in price, the demand for the good is ________.

Accepted Answer

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

Question 17

If demand is price elastic,

Accepted Answer

A)  a 1 percent decrease in the price leads to an increase in the quantity demanded that exceeds 1 percent. 
B)  a 1 percent increase in the price leads to an increase in the quantity demanded that exceeds 1 percent. 
C)  a 1 percent decrease in the price leads to a decrease in the quantity demanded that is less than 1 percent. 
D)  the price is very sensitive to any shift of the supply curve. 
A)  a 1 percent decrease in the price leads to an increase in the quantity demanded that exceeds 1 percent. 
B)  a 1 percent increase in the price leads to an increase in the quantity demanded that exceeds 1 percent. 
C)  a 1 percent decrease in the price leads to a decrease in the quantity demanded that is less than 1 percent. 
D)  the price is very sensitive to any shift of the supply curve.

Question 18

If a price decrease results in your expenditure on a good decreasing, your demand must be

Accepted Answer

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

Question 19

The cross elasticity of demand between apples and oranges is defined as the

Accepted Answer

A)  percentage change in the quantity of apples demanded divided by the percentage change in the price of oranges. 
B)  price elasticity of demand for apples divided by the price elasticity of demand for oranges. 
C)  percentage change in the quantity of apples demanded divided by the percentage change in the quantity of oranges demanded. 
D)  change in the quantity of apples demanded divided by the change in the quantity of oranges demanded. 
A)  percentage change in the quantity of apples demanded divided by the percentage change in the price of oranges. 
B)  price elasticity of demand for apples divided by the price elasticity of demand for oranges. 
C)  percentage change in the quantity of apples demanded divided by the percentage change in the quantity of oranges demanded. 
D)  change in the quantity of apples demanded divided by the change in the quantity of oranges demanded.

Question 20

A determinant of the price elasticity of demand is

Accepted Answer

A)  whether the good is a durable or a nondurable. 
B)  the availability of resources used in the production of the product. 
C)  how well consumers like the good. 
D)  the proportion of the consumer's total budget spent on the good. 
A)  whether the good is a durable or a nondurable. 
B)  the availability of resources used in the production of the product. 
C)  how well consumers like the good. 
D)  the proportion of the consumer's total budget spent on the good.

A fall in the price of cabbage from $10.50 to $9.50 per bushel increases the quantity demanded from 18,800 to 21,200 bushels. The price elasticity of demand is

Redbox rents DVDs for $1 per day via self-service kiosks located across the United States. In 2007, each kiosk averaged about 50 rentals per day. Suppose Redbox increases their daily price to $1.50. What is the price elasticity of demand if rentals decrease by 20 per day?

What factors determine the magnitude of the price elasticity of demand?

-The table above gives the demand schedule for peas. Between point C and point D, the price elasticity of demand is

The elasticity of supply for paintings by Monet is

Freezing temperatures in California have sharply reduced the supply of oranges in the U.S. You predict that the price of oranges will , and the more elastic the demand for oranges, the will be the effect on the price.

The price elasticity of demand is always positive, as is the price elasticity of supply. Is the cross elasticity of demand always positive? Explain your answer.

Using average price and average quantity, calculate the price elasticity of demand if a price rise from $8 to $10 and decreases the quantity demanded from 20 units to 15 units. The price elasticity of demand equals

The price of a bus ride decreases, and the total revenue of the bus company decreases. The demand for bus rides is ________.

The demand for a good is more price elastic

Which of the following leads a good to have a high elasticity of supply? I. The good must be produced using unique resources. II) The good is produced using commonly available resources.

-The increase in the demand for widgets, shown in the figure above, is the result of a decrease in the price of McBoover devices from $11 to $9. Therefore, the cross-price elasticity for these two products is

-The figure illustrates the demand for eggs. At what price will egg sellers maximize their total revenue?

In the nation of Transporta, the income elasticity of demand for used cars is -2.66. So when incomes in this nation increase by 10 percent

When the percentage change in quantity demanded is less than the percentage change in price, the demand for the good is ________.

If demand is price elastic,

If a price decrease results in your expenditure on a good decreasing, your demand must be

The cross elasticity of demand between apples and oranges is defined as the

A determinant of the price elasticity of demand 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 fall in the price of cabbage from $10.50 to $9.50 per bushel increases the quantity demanded from 18,800 to 21,200 bushels. The price elasticity of demand is

Redbox rents DVDs for $1 per day via self-service kiosks located across the United States. In 2007, each kiosk averaged about 50 rentals per day. Suppose Redbox increases their daily price to $1.50. What is the price elasticity of demand if rentals decrease by 20 per day?

What factors determine the magnitude of the price elasticity of demand?

-The table above gives the demand schedule for peas. Between point C and point D, the price elasticity of demand is

The elasticity of supply for paintings by Monet is

Freezing temperatures in California have sharply reduced the supply of oranges in the U.S. You predict that the price of oranges will ________, and the more elastic the demand for oranges, the ________ will be the effect on the price.

The price elasticity of demand is always positive, as is the price elasticity of supply. Is the cross elasticity of demand always positive? Explain your answer.

Using average price and average quantity, calculate the price elasticity of demand if a price rise from $8 to $10 and decreases the quantity demanded from 20 units to 15 units. The price elasticity of demand equals

The price of a bus ride decreases, and the total revenue of the bus company decreases. The demand for bus rides is ________.

The demand for a good is more price elastic

Which of the following leads a good to have a high elasticity of supply? I. The good must be produced using unique resources. II) The good is produced using commonly available resources.

-The increase in the demand for widgets, shown in the figure above, is the result of a decrease in the price of McBoover devices from $11 to $9. Therefore, the cross-price elasticity for these two products is

-The figure illustrates the demand for eggs. At what price will egg sellers maximize their total revenue?

In the nation of Transporta, the income elasticity of demand for used cars is -2.66. So when incomes in this nation increase by 10 percent

When the percentage change in quantity demanded is less than the percentage change in price, the demand for the good is ________.

If demand is price elastic,

If a price decrease results in your expenditure on a good decreasing, your demand must be

The cross elasticity of demand between apples and oranges is defined as the

A determinant of the price elasticity of demand 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

Freezing temperatures in California have sharply reduced the supply of oranges in the U.S. You predict that the price of oranges will , and the more elastic the demand for oranges, the will be the effect on the price.