Question 1

When Joe's Gas raises its prices for regular unleaded,total revenue from both regular unleaded falls to zero.It must be the case that:

Accepted Answer

A) the demand for Joe's regular unleaded gasoline is perfectly elastic. 
B) the demand for regular unleaded must be inelastic. 
C) there are NOT many good substitutes for regular unleaded gasoline. 
D) consumers are switching to premium grades of gasoline. 
A) the demand for Joe's regular unleaded gasoline is perfectly elastic. 
B) the demand for regular unleaded must be inelastic. 
C) there are NOT many good substitutes for regular unleaded gasoline. 
D) consumers are switching to premium grades of gasoline.

Question 2

Suppose you have one hour to catch a flight to Miami for spring break.It takes 45 minutes to drive to the airport.Your car is almost out of gas;the price of gas at the closest gas station is higher than at the one on the other side of the town.To you,the price elasticity of demand for gas is likely to be ______ than it would be if you had several hours before the flight.

Accepted Answer

A) higher 
B) more inelastic 
C) more elastic 
D) no different 
A) higher 
B) more inelastic 
C) more elastic 
D) no different

Question 3

Suppose you believe that plaid flannel shirts are an inferior good,and want to test this with economic data.You expect to find that the income elasticity for plaid flannel shirts is:

Accepted Answer

A) close to zero. 
B) greater than zero,but less than one. 
C) greater than one. 
D) less than zero. 
A) close to zero. 
B) greater than zero,but less than one. 
C) greater than one. 
D) less than zero.

Question 4

When the price of hot dogs is $1.50 each,500 hot dogs are sold every day.After the price falls to $1.35 each,510 hot dogs are sold every day.At the original price,what is the price elasticity of demand for hot dogs?

Accepted Answer

A) 66.67 
B) 5 
C) 2 
D) 0.2 
A) 66.67 
B) 5 
C) 2 
D) 0.2

Question 5

The following graph depicts demand.  
Refer to the figure above.The price elasticity of demand at point B is:

Accepted Answer

A) 3/4. 
B) 4/3. 
C) 3. 
D) 1/3. 
A) 3/4. 
B) 4/3. 
C) 3. 
D) 1/3.

Question 6

Suppose a 10% increase in the price of pain relievers leads to a 5% decrease in quantity demanded of pain relievers.The demand for pain relievers,with respect to price,is:

Accepted Answer

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

Question 7

On a given linear demand curve,demand is ______ at high prices than at low prices.

Accepted Answer

A) more price elastic. 
B) more price inelastic. 
C) more negative. 
D) more volatile. 
A) more price elastic. 
B) more price inelastic. 
C) more negative. 
D) more volatile.

Question 8

If you consume less of a good as your income increases:

Accepted Answer

A) your demand curve is not downward sloping for that good. 
B) the good must be an inferior good. 
C) the good must not have any close substitutes. 
D) your quantity demanded changed by a movement along the demand function. 
A) your demand curve is not downward sloping for that good. 
B) the good must be an inferior good. 
C) the good must not have any close substitutes. 
D) your quantity demanded changed by a movement along the demand function.

Question 9

Jeans in general have fewer close substitutes than any specific brand of jeans.Therefore,the demand for jeans in general would be _______ than the demand for a specific brand of jeans.

Accepted Answer

A) more elastic 
B) more inelastic 
C) more unitary elastic 
D) less inelastic 
A) more elastic 
B) more inelastic 
C) more unitary elastic 
D) less inelastic

Question 10

Suppose that total expenditures for coffee reach a maximum at a price of $5 per pound.At this price,the demand for coffee is:

Accepted Answer

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

When Joe's Gas raises its prices for regular unleaded,total revenue from both regular unleaded falls to zero.It must be the case that:

Suppose you believe that plaid flannel shirts are an inferior good,and want to test this with economic data.You expect to find that the income elasticity for plaid flannel shirts is:

When the price of hot dogs is $1.50 each,500 hot dogs are sold every day.After the price falls to $1.35 each,510 hot dogs are sold every day.At the original price,what is the price elasticity of demand for hot dogs?

The following graph depicts demand. Refer to the figure above.The price elasticity of demand at point B is:

Suppose a 10% increase in the price of pain relievers leads to a 5% decrease in quantity demanded of pain relievers.The demand for pain relievers,with respect to price,is:

On a given linear demand curve,demand is ______ at high prices than at low prices.

If you consume less of a good as your income increases:

Jeans in general have fewer close substitutes than any specific brand of jeans.Therefore,the demand for jeans in general would be _______ than the demand for a specific brand of jeans.

Suppose that total expenditures for coffee reach a maximum at a price of $5 per pound.At this price,the demand for coffee is:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

Externalities and Property Rights

The Economics of Information

Labor Markets, Poverty, and Income Distribution

The Environment, Health, and Safety

Public Goods and Tax Policy

Spending, Income, and GDP

Inflation and the Price Level

Wages and Unemployment

Economic Growth

Saving, Capital Formation, and Financial Markets

Money, Prices, and the Financial System

Short-Term Economic Fluctuations

Spending, Output, and Fiscal Policy

Monetary Policy and the Federal Reserve

Aggregate Demand, Aggregate Supply, and Business Cycles

Macroeconomic Policy

Exchange Rates, International Trade, and Capital Flows

Filters

Exam 4: Elasticity

When Joe's Gas raises its prices for regular unleaded,total revenue from both regular unleaded falls to zero.It must be the case that:

Suppose you believe that plaid flannel shirts are an inferior good,and want to test this with economic data.You expect to find that the income elasticity for plaid flannel shirts is:

When the price of hot dogs is $1.50 each,500 hot dogs are sold every day.After the price falls to $1.35 each,510 hot dogs are sold every day.At the original price,what is the price elasticity of demand for hot dogs?

The following graph depicts demand. Refer to the figure above.The price elasticity of demand at point B is:

Suppose a 10% increase in the price of pain relievers leads to a 5% decrease in quantity demanded of pain relievers.The demand for pain relievers,with respect to price,is:

On a given linear demand curve,demand is ______ at high prices than at low prices.

If you consume less of a good as your income increases:

Jeans in general have fewer close substitutes than any specific brand of jeans.Therefore,the demand for jeans in general would be _______ than the demand for a specific brand of jeans.

Suppose that total expenditures for coffee reach a maximum at a price of $5 per pound.At this price,the demand for coffee is:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

Externalities and Property Rights

The Economics of Information

Labor Markets, Poverty, and Income Distribution

The Environment, Health, and Safety

Public Goods and Tax Policy

Spending, Income, and GDP

Inflation and the Price Level

Wages and Unemployment

Economic Growth

Saving, Capital Formation, and Financial Markets

Money, Prices, and the Financial System

Short-Term Economic Fluctuations

Spending, Output, and Fiscal Policy

Monetary Policy and the Federal Reserve

Aggregate Demand, Aggregate Supply, and Business Cycles

Macroeconomic Policy

Exchange Rates, International Trade, and Capital Flows

Filters