Question 1

Price elasticity of demand is often expressed as a positive number because:

Accepted Answer

A)  using the formula yields a positive number. 
B)  demand has a positive slope. 
C)  it's convenient to use absolute values even though the formula yields non-positive numbers. 
D)  both the numerator and the denominator in the formula are negative. 
A)  using the formula yields a positive number. 
B)  demand has a positive slope. 
C)  it's convenient to use absolute values even though the formula yields non-positive numbers. 
D)  both the numerator and the denominator in the formula are negative.

Question 2

Mike knows how to make hamburgers (like many other people)and got a minimum wage job at Burger King.With respect to price elasticity of supply,the supply curve for hamburgers is __________ because the inputs to production are __________.

Accepted Answer

A)  inelastic;mobile 
B)  inelastic;immobile 
C)  inelastic;flexible 
D)  elastic;flexible 
A)  inelastic;mobile 
B)  inelastic;immobile 
C)  inelastic;flexible 
D)  elastic;flexible

Question 3

Suppose two demand curves have a point in common.With respect to price at that point,demand shown by the steeper curve will be _______ the less steep curve.

Accepted Answer

A)  more elastic than 
B)  less elastic than 
C)  as elastic as 
D)  more likely to be unitary than 
A)  more elastic than 
B)  less elastic than 
C)  as elastic as 
D)  more likely to be unitary than

Question 4

The demand for a good is inelastic with respect to price,if the price elasticity of demand is:

Accepted Answer

A)  equals one. 
B)  is greater than one. 
C)  is less than one. 
D)  equals negative one. 
A)  equals one. 
B)  is greater than one. 
C)  is less than one. 
D)  equals negative one.

Question 5

Price elasticity of demand for transportation generally is:

Accepted Answer

A)  the same as price elasticity of the demand for bus tickets. 
B)  greater than price elasticity of the demand for bus tickets. 
C)  less than price elasticity of the demand for bus tickets. 
D)  greater than price elasticity of the demand for bus tickets when bus tickets are expensive,but less than price elasticity of the demand for bus tickets when the prices of bus tickets fall. 
A)  the same as price elasticity of the demand for bus tickets. 
B)  greater than price elasticity of the demand for bus tickets. 
C)  less than price elasticity of the demand for bus tickets. 
D)  greater than price elasticity of the demand for bus tickets when bus tickets are expensive,but less than price elasticity of the demand for bus tickets when the prices of bus tickets fall.

Question 6

Lakeville is a small community that completely surrounds a scenic lake up north.Lakeville's zoning regulations require that residential lots have at least one hundred feet of frontage,or shoreline,on the lake.The total shoreline of the lake is 5,000 feet.
There are currently 40 homes on the lake.If demand for lakefront property in Lakeville increased,

Accepted Answer

A)  the price of lakefront property would not change because there is excess supply. 
B)  the quantity supplied of lakefront property would decrease because there is excess demand. 
C)  the quantity supplied of lakefront property would be zero because there is no room for new residents. 
D)  the quantity supplied of lakefront property would increase,and the price per lot would increase. 
A)  the price of lakefront property would not change because there is excess supply. 
B)  the quantity supplied of lakefront property would decrease because there is excess demand. 
C)  the quantity supplied of lakefront property would be zero because there is no room for new residents. 
D)  the quantity supplied of lakefront property would increase,and the price per lot would increase.

Question 7

The following graph depicts demand.  
Refer to the figure above.At point A,demand is:

Accepted Answer

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

Question 8

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 9

Suppose that a new drug has been approved to treat a life-threatening disease.Demand for that drug is shown on the graph below.Prior to approval of this drug,the only treatment for this condition was non-prescription pain relief.Demand for one brand of non-prescription pain reliever is also shown on the graph below.  
Refer to the figure above.If the manufacturer of the new drug chose to increase its price from $90 to $100,consumers would acquire ______ doses,and have _____ total expenditures.

Accepted Answer

A)  more;higher 
B)  fewer;lower 
C)  more;lower 
D)  fewer;higher 
A)  more;higher 
B)  fewer;lower 
C)  more;lower 
D)  fewer;higher

Question 10

If most consumer goods and services are ______,then most income elasticities are ______.

Accepted Answer

A)  normal;negative 
B)  inferior;positive 
C)  normal;greater than one 
D)  normal;positive 
A)  normal;negative 
B)  inferior;positive 
C)  normal;greater than one 
D)  normal;positive

Question 11

In surveying their alumni,State U's economics department discovered that ramen noodle consumption declined as soon as students graduated and found jobs.One conclusion the survey team might draw from this result is that:

Accepted Answer

A)  there is excess demand for ramen noodles. 
B)  the equilibrium price for ramen noodles is too high. 
C)  college graduates have a high reservation price for ramen noodles. 
D)  ramen noodles are an inferior good. 
A)  there is excess demand for ramen noodles. 
B)  the equilibrium price for ramen noodles is too high. 
C)  college graduates have a high reservation price for ramen noodles. 
D)  ramen noodles are an inferior good.

Question 12

Suppose that a new drug has been approved to treat a life-threatening disease.Demand for that drug is shown on the graph below.Prior to approval of this drug,the only treatment for this condition was non-prescription pain relief.Demand for one brand of non-prescription pain reliever is also shown on the graph below.  
Refer to the figure above.The manufacturer of the pain reliever would _______ total revenue by increasing the price from $15 to $25.

Accepted Answer

A)  increase 
B)  decrease,but continue to earn some 
C)  experience no change 
D)  completely eliminate 
A)  increase 
B)  decrease,but continue to earn some 
C)  experience no change 
D)  completely eliminate

Question 13

If income elasticity for a particular good has a negative sign:

Accepted Answer

A)  the good is a normal good. 
B)  as income increases,consumers will tend to purchase more of the good. 
C)  as income increases,consumers will tend to purchase less of the good. 
D)  the good is a luxury good. 
A)  the good is a normal good. 
B)  as income increases,consumers will tend to purchase more of the good. 
C)  as income increases,consumers will tend to purchase less of the good. 
D)  the good is a luxury good.

Question 14

For OutBack Steakhouse,seating capacity is limited in the short run.In the long run they can add as many seats as they want.Therefore,the price elasticity of supply for the meals in OutBack would be _____ in the short run than in the long run.

Accepted Answer

A)  higher 
B)  lower 
C)  the same 
D)  more variable 
A)  higher 
B)  lower 
C)  the same 
D)  more variable

Question 15

If a 10% decrease in the price of good leads to a 20% increase in the quantity demanded of that good,the price elasticity of demand for that good would be:

Accepted Answer

A)  ½. 
B)  2. 
C)  10. 
D)  20. 
A)  ½. 
B)  2. 
C)  10. 
D)  20.

Question 16

Suppose that the company that owns all of the vending machines on your campus has doubled the price of a can of soda.They notice that they are selling approximately 15% fewer sodas.Price elasticity of demand for sodas from the campus vending machines is:

Accepted Answer

A)  inelastic 
B)  unitary elastic 
C)  elastic 
D)  infinite 
A)  inelastic 
B)  unitary elastic 
C)  elastic 
D)  infinite

Question 17

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

Accepted Answer

A)  3/16. 
B)  16/3. 
C)  3/4. 
D)  3/8. 
A)  3/16. 
B)  16/3. 
C)  3/4. 
D)  3/8.

Question 18

If the percent change in quantity demanded is zero for any percent change in the price,demand is classified as:

Accepted Answer

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

Question 19

If the percentage change in price for a good is equal to the percentage change in quantity demanded of that good,then the demand for that good,with respect to price,is:

Accepted Answer

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

Question 20

If the elasticity of demand for the latest American Idol CD is 1.4,this means:

Accepted Answer

A)  few substitutes exist. 
B)  a 1% increase in the price leads to a 14% reduction in quantity demanded. 
C)  a 10% decrease in the price leads to a 140% increase in quantity demanded. 
D)  a 5% increase in the price leads to a 7% decrease in quantity demanded. 
A)  few substitutes exist. 
B)  a 1% increase in the price leads to a 14% reduction in quantity demanded. 
C)  a 10% decrease in the price leads to a 140% increase in quantity demanded. 
D)  a 5% increase in the price leads to a 7% decrease in quantity demanded.

Price elasticity of demand is often expressed as a positive number because:

Mike knows how to make hamburgers (like many other people)and got a minimum wage job at Burger King.With respect to price elasticity of supply,the supply curve for hamburgers is because the inputs to production are .

Suppose two demand curves have a point in common.With respect to price at that point,demand shown by the steeper curve will be _______ the less steep curve.

The demand for a good is inelastic with respect to price,if the price elasticity of demand is:

Price elasticity of demand for transportation generally is:

The following graph depicts demand. Refer to the figure above.At point A,demand is:

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.

If most consumer goods and services are ,then most income elasticities are .

In surveying their alumni,State U's economics department discovered that ramen noodle consumption declined as soon as students graduated and found jobs.One conclusion the survey team might draw from this result is that:

If income elasticity for a particular good has a negative sign:

For OutBack Steakhouse,seating capacity is limited in the short run.In the long run they can add as many seats as they want.Therefore,the price elasticity of supply for the meals in OutBack would be _____ in the short run than in the long run.

If a 10% decrease in the price of good leads to a 20% increase in the quantity demanded of that good,the price elasticity of demand for that good would be:

Suppose that the company that owns all of the vending machines on your campus has doubled the price of a can of soda.They notice that they are selling approximately 15% fewer sodas.Price elasticity of demand for sodas from the campus vending machines is:

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

If the percent change in quantity demanded is zero for any percent change in the price,demand is classified as:

If the percentage change in price for a good is equal to the percentage change in quantity demanded of that good,then the demand for that good,with respect to price,is:

If the elasticity of demand for the latest American Idol CD is 1.4,this means:

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

Filters

Exam 4: Elasticity

Price elasticity of demand is often expressed as a positive number because:

Mike knows how to make hamburgers (like many other people)and got a minimum wage job at Burger King.With respect to price elasticity of supply,the supply curve for hamburgers is __________ because the inputs to production are __________.

Suppose two demand curves have a point in common.With respect to price at that point,demand shown by the steeper curve will be _______ the less steep curve.

The demand for a good is inelastic with respect to price,if the price elasticity of demand is:

Price elasticity of demand for transportation generally is:

The following graph depicts demand. Refer to the figure above.At point A,demand is:

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.

If most consumer goods and services are ______,then most income elasticities are ______.

In surveying their alumni,State U's economics department discovered that ramen noodle consumption declined as soon as students graduated and found jobs.One conclusion the survey team might draw from this result is that:

If income elasticity for a particular good has a negative sign:

For OutBack Steakhouse,seating capacity is limited in the short run.In the long run they can add as many seats as they want.Therefore,the price elasticity of supply for the meals in OutBack would be _____ in the short run than in the long run.

If a 10% decrease in the price of good leads to a 20% increase in the quantity demanded of that good,the price elasticity of demand for that good would be:

Suppose that the company that owns all of the vending machines on your campus has doubled the price of a can of soda.They notice that they are selling approximately 15% fewer sodas.Price elasticity of demand for sodas from the campus vending machines is:

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

If the percent change in quantity demanded is zero for any percent change in the price,demand is classified as:

If the percentage change in price for a good is equal to the percentage change in quantity demanded of that good,then the demand for that good,with respect to price,is:

If the elasticity of demand for the latest American Idol CD is 1.4,this means:

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

Filters

Mike knows how to make hamburgers (like many other people)and got a minimum wage job at Burger King.With respect to price elasticity of supply,the supply curve for hamburgers is because the inputs to production are .

If most consumer goods and services are ,then most income elasticities are .