Question 1

On a straight-line downward-sloping demand curve, the maximum elasticity of demand occurs

Accepted Answer

A)  at its vertical intercept. 
B)  at its midpoint. 
C)  at its horizontal intercept. 
D)  where it intersects the supply curve. 
A)  at its vertical intercept. 
B)  at its midpoint. 
C)  at its horizontal intercept. 
D)  where it intersects the supply curve.

Question 2

Suppose the quantity demanded is 5 units when the price is $1.00. If the price rises to $2.00, the quantity demanded falls to 3 units. The price elasticity of demand is

Accepted Answer

A)  0.5. 
B)  0.75. 
C)  1.33. 
D)  2.00. 
A)  0.5. 
B)  0.75. 
C)  1.33. 
D)  2.00.

Question 3

If University of Nebraska increased its season football ticket sales from 43,000 to 47,000 when it lowered price from $350.00 to $300.00, then its demand for season tickets must be ________ because total revenue ________ when the price was lowered.

Accepted Answer

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

Question 4

Propecia was developed to treat mild to moderate male pattern hair loss in men. Marco has hair loss and he is willing to pay any amount of money to be able to buy this drug each month. Marco's price elasticity of demand is ________.

Accepted Answer

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

Question 5

The price elasticity of demand for wheat is 0.42. A drought cuts the supply of wheat. What will happen to the farmers' total revenue?

Accepted Answer

A)  The total revenue will increase. 
B)  The total revenue will decrease. 
C)  The total revenue will not change. 
D)  There is not enough information to determine what happens to the total revenue. 
A)  The total revenue will increase. 
B)  The total revenue will decrease. 
C)  The total revenue will not change. 
D)  There is not enough information to determine what happens to the total revenue.

Question 6

If Taco Bell determines that the demand for its food is elastic, Taco Bell should raise its price to increase its total revenue.

Accepted Answer

A) True 
 B)False

Question 7

When does a decrease in supply raise the price more: When demand is elastic or when demand is inelastic? When OPEC decreases the supply of oil, the price of gasoline skyrockets. Hence is the demand for gasoline elastic or inelastic?

Accepted Answer

A decrease in supply raises th

Question 8

Explain why the availability of resources affects the elasticity of supply.

Accepted Answer

A good that can be produced using common

Question 9

Suppose a 10 percent increase in the price of textbooks decreases the quantity demanded by 20 percent. The elasticity of demand for textbooks is

Accepted Answer

A)  0.2. 
B)  2.0. 
C)  5.0. 
D)  10.0. 
A)  0.2. 
B)  2.0. 
C)  5.0. 
D)  10.0.

Question 10

If the price of salt increases and the quantity demanded does not change, then

Accepted Answer

A)  the price elasticity of demand is equal to zero. 
B)  demand is perfectly inelastic. 
C)  the demand curve for salt is horizontal. 
D)  Both answers A and B are correct. 
A)  the price elasticity of demand is equal to zero. 
B)  demand is perfectly inelastic. 
C)  the demand curve for salt is horizontal. 
D)  Both answers A and B are correct.

Question 11

If a 4 percent rise in the price of peanut butter lowers the total revenue received by the producers of peanut butter by 4 percent, the demand for peanut butter

Accepted Answer

A)  is elastic. 
B)  is inelastic. 
C)  is unit elastic. 
D)  has an elasticity of 2.0. 
A)  is elastic. 
B)  is inelastic. 
C)  is unit elastic. 
D)  has an elasticity of 2.0.

Question 12

If the price of oil is $60 per barrel, the quantity of oil supplied is 70 million barrels per day. If the price is $40 per barrel, the quantity of oil supplied is 69 million barrels per day. This implies that the

Accepted Answer

A)  supply of oil is elastic. 
B)  supply of oil is inelastic. 
C)  demand for oil is inelastic. 
D)  demand for oil is elastic. 
A)  supply of oil is elastic. 
B)  supply of oil is inelastic. 
C)  demand for oil is inelastic. 
D)  demand for oil is elastic.

Question 13

Marvin loves chocolate truffles. As the price of a chocolate truffle increases from $1 to $2 to $3, Marvin continues to buy a dozen chocolate truffles every week. Marvin's demand for chocolate truffles is ________.

Accepted Answer

A)  elastic 
B)  unit elastic 
C)  illustrated by a horizontal demand curve 
D)  perfectly inelastic 
A)  elastic 
B)  unit elastic 
C)  illustrated by a horizontal demand curve 
D)  perfectly inelastic

On a straight-line downward-sloping demand curve, the maximum elasticity of demand occurs

Suppose the quantity demanded is 5 units when the price is $1.00. If the price rises to $2.00, the quantity demanded falls to 3 units. The price elasticity of demand is

If University of Nebraska increased its season football ticket sales from 43,000 to 47,000 when it lowered price from $350.00 to $300.00, then its demand for season tickets must be because total revenue when the price was lowered.

Propecia was developed to treat mild to moderate male pattern hair loss in men. Marco has hair loss and he is willing to pay any amount of money to be able to buy this drug each month. Marco's price elasticity of demand is ________.

The price elasticity of demand for wheat is 0.42. A drought cuts the supply of wheat. What will happen to the farmers' total revenue?

If Taco Bell determines that the demand for its food is elastic, Taco Bell should raise its price to increase its total revenue.

When does a decrease in supply raise the price more: When demand is elastic or when demand is inelastic? When OPEC decreases the supply of oil, the price of gasoline skyrockets. Hence is the demand for gasoline elastic or inelastic?

Explain why the availability of resources affects the elasticity of supply.

Suppose a 10 percent increase in the price of textbooks decreases the quantity demanded by 20 percent. The elasticity of demand for textbooks is

If the price of salt increases and the quantity demanded does not change, then

If a 4 percent rise in the price of peanut butter lowers the total revenue received by the producers of peanut butter by 4 percent, the demand for peanut butter

If the price of oil is $60 per barrel, the quantity of oil supplied is 70 million barrels per day. If the price is $40 per barrel, the quantity of oil supplied is 69 million barrels per day. This implies that the

Marvin loves chocolate truffles. As the price of a chocolate truffle increases from $1 to $2 to $3, Marvin continues to buy a dozen chocolate truffles every week. Marvin's demand for chocolate truffles 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

On a straight-line downward-sloping demand curve, the maximum elasticity of demand occurs

Suppose the quantity demanded is 5 units when the price is $1.00. If the price rises to $2.00, the quantity demanded falls to 3 units. The price elasticity of demand is

If University of Nebraska increased its season football ticket sales from 43,000 to 47,000 when it lowered price from $350.00 to $300.00, then its demand for season tickets must be ________ because total revenue ________ when the price was lowered.

Propecia was developed to treat mild to moderate male pattern hair loss in men. Marco has hair loss and he is willing to pay any amount of money to be able to buy this drug each month. Marco's price elasticity of demand is ________.

The price elasticity of demand for wheat is 0.42. A drought cuts the supply of wheat. What will happen to the farmers' total revenue?

If Taco Bell determines that the demand for its food is elastic, Taco Bell should raise its price to increase its total revenue.

When does a decrease in supply raise the price more: When demand is elastic or when demand is inelastic? When OPEC decreases the supply of oil, the price of gasoline skyrockets. Hence is the demand for gasoline elastic or inelastic?

Explain why the availability of resources affects the elasticity of supply.

Suppose a 10 percent increase in the price of textbooks decreases the quantity demanded by 20 percent. The elasticity of demand for textbooks is

If the price of salt increases and the quantity demanded does not change, then

If a 4 percent rise in the price of peanut butter lowers the total revenue received by the producers of peanut butter by 4 percent, the demand for peanut butter

If the price of oil is $60 per barrel, the quantity of oil supplied is 70 million barrels per day. If the price is $40 per barrel, the quantity of oil supplied is 69 million barrels per day. This implies that the

Marvin loves chocolate truffles. As the price of a chocolate truffle increases from $1 to $2 to $3, Marvin continues to buy a dozen chocolate truffles every week. Marvin's demand for chocolate truffles 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

If University of Nebraska increased its season football ticket sales from 43,000 to 47,000 when it lowered price from $350.00 to $300.00, then its demand for season tickets must be because total revenue when the price was lowered.