Question 1

Suppose that the price elasticity of supply for the Hope Diamond is zero.Therefore,the supply curve for the Hope Diamond is:

Accepted Answer

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

Question 2

Suppose the price price P gives us a price elasticity of demand equal to 1.It is on the ______ portion of the demand curve.

Accepted Answer

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

Question 3

When the price of NBA ticket is $25 each,30,000 tickets are sold every game.After the price rises to $30 each,20,000 tickets are sold every game.At the original price,the demand for NBA ticket is:

Accepted Answer

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

Question 4

Firms that produce goods with few or no substitutes will find that:

Accepted Answer

A)  lowering price increases total revenues. 
B)  raising price decreases total revenues. 
C)  raising price increases total revenues. 
D)  raising price leaves total revenues unchanged. 
A)  lowering price increases total revenues. 
B)  raising price decreases total revenues. 
C)  raising price increases total revenues. 
D)  raising price leaves total revenues unchanged.

Question 5

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.
Suppose there are currently 50 homes on the lake,each with one hundred feet of shoreline.If demand for lakefront homes increased,

Accepted Answer

A)  there would be excess demand for lakefront homes that the market could not correct. 
B)  a new equilibrium would be established at a quantity greater than 50 and at a higher price. 
C)  a new equilibrium would be established at a quantity equal to 50 and at a higher price. 
D)  no new residents would be able to purchase a home on the lake because all of the lots are taken. 
A)  there would be excess demand for lakefront homes that the market could not correct. 
B)  a new equilibrium would be established at a quantity greater than 50 and at a higher price. 
C)  a new equilibrium would be established at a quantity equal to 50 and at a higher price. 
D)  no new residents would be able to purchase a home on the lake because all of the lots are taken.

Question 6

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 main reason for the difference in the slopes of the demand curves is that:

Accepted Answer

A)  one drug has many substitutes and the other does not. 
B)  one drug is new on the market and the other has been available for a long time. 
C)  one drug is heavily regulated by the Food and Drug Administration and the other is not. 
D)  one market is in equilibrium and the other is not. 
A)  one drug has many substitutes and the other does not. 
B)  one drug is new on the market and the other has been available for a long time. 
C)  one drug is heavily regulated by the Food and Drug Administration and the other is not. 
D)  one market is in equilibrium and the other is not.

Question 7

The price elasticity of demand for a good is the response of:

Accepted Answer

A)  demand to a one percent change in price of that good. 
B)  demand to a one percent change in price of the related good. 
C)  quantity demanded to a one percent change in price of that good. 
D)  quantity demanded to a one percent change in price of the related good. 
A)  demand to a one percent change in price of that good. 
B)  demand to a one percent change in price of the related good. 
C)  quantity demanded to a one percent change in price of that good. 
D)  quantity demanded to a one percent change in price of the related good.

Question 8

At the price of $20 each,demand for T-shirts for students group's fundraising activity is unitary elastic.Total expenditure for T-shirts reaches ______ at a price of $20 each.

Accepted Answer

A)  zero 
B)  its minimum 
C)  its maximum 
D)  its maximum profit 
A)  zero 
B)  its minimum 
C)  its maximum 
D)  its maximum profit

Question 9

For which of the following products is demand likely to be least price elastic?

Accepted Answer

A)  Frozen food 
B)  Soft drinks 
C)  Groceries 
D)  Diet Coke 
A)  Frozen food 
B)  Soft drinks 
C)  Groceries 
D)  Diet Coke

Question 10

The reason a brand name item (e.g. ,Tyson chicken)has a larger price elasticity than a class of items (e.g. ,chicken),is because:

Accepted Answer

A)  there are fewer substitutes for Tyson chicken. 
B)  it takes a lot of time to adjust to a substitute brand of chicken. 
C)  the share of income spent on "chicken" is larger than spent on "Tyson Chicken". 
D)  there are fewer substitutes for chicken than for Tyson chicken. 
A)  there are fewer substitutes for Tyson chicken. 
B)  it takes a lot of time to adjust to a substitute brand of chicken. 
C)  the share of income spent on "chicken" is larger than spent on "Tyson Chicken". 
D)  there are fewer substitutes for chicken than for Tyson chicken.

Question 11

The change in quantity supplied that results from a change in price is known as the:

Accepted Answer

A)  cross-price elasticity of supply. 
B)  slope of the supply curve. 
C)  price elasticity of supply. 
D)  cross-price elasticity of demand. 
A)  cross-price elasticity of supply. 
B)  slope of the supply curve. 
C)  price elasticity of supply. 
D)  cross-price elasticity of demand.

Question 12

For any horizontal demand curve,the calculated price elasticity of demand is:

Accepted Answer

A)  0. 
B)  1. 
C)  infinity. 
D)  equal to the price of the good. 
A)  0. 
B)  1. 
C)  infinity. 
D)  equal to the price of the good.

Question 13

Suppose the price P on a given demand curve results in a price elasticity of demand equal to 1.Any price higher than P will lie on the _______ part of the demand curve,and any price lower than P will lie on the _______ part of the demand curve.

Accepted Answer

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

Question 14

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 15

If the percentage change in the price of a good is less than the percentage change in the 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 inelastic. 
A)  elastic. 
B)  inelastic. 
C)  unitary elastic. 
D)  perfectly inelastic.

Question 16

If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent,then the price elasticity of demand has a value of:

Accepted Answer

A)  0.05. 
B)  0.5. 
C)  2. 
D)  5. 
A)  0.05. 
B)  0.5. 
C)  2. 
D)  5.

Question 17

The responsiveness of quantity demanded for one good when the price of a different good changes is measured by the:

Accepted Answer

A)  price elasticity of demand. 
B)  income elasticity of demand. 
C)  price elasticity of supply. 
D)  cross-price elasticity of demand. 
A)  price elasticity of demand. 
B)  income elasticity of demand. 
C)  price elasticity of supply. 
D)  cross-price elasticity of demand.

Question 18

The following graph depicts demand.  
Refer to the figure above.The slope of the demand curve (if you ignore the negative sign)is:

Accepted Answer

A)  2. 
B)  1.5. 
C)  1. 
D)  0.5. 
A)  2. 
B)  1.5. 
C)  1. 
D)  0.5.

Question 19

For which of the following products is income elasticity likely to be greatest?

Accepted Answer

A)  Salt 
B)  Groceries 
C)  Airplane travel 
D)  Blue jeans 
A)  Salt 
B)  Groceries 
C)  Airplane travel 
D)  Blue jeans

Question 20

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

Accepted Answer

A)  5/2. 
B)  5/8. 
C)  2/5. 
D)  8/5. 
A)  5/2. 
B)  5/8. 
C)  2/5. 
D)  8/5.

Suppose that the price elasticity of supply for the Hope Diamond is zero.Therefore,the supply curve for the Hope Diamond is:

Suppose the price price P gives us a price elasticity of demand equal to 1.It is on the ______ portion of the demand curve.

When the price of NBA ticket is $25 each,30,000 tickets are sold every game.After the price rises to $30 each,20,000 tickets are sold every game.At the original price,the demand for NBA ticket is:

Firms that produce goods with few or no substitutes will find that:

The price elasticity of demand for a good is the response of:

At the price of $20 each,demand for T-shirts for students group's fundraising activity is unitary elastic.Total expenditure for T-shirts reaches ______ at a price of $20 each.

For which of the following products is demand likely to be least price elastic?

The reason a brand name item (e.g. ,Tyson chicken)has a larger price elasticity than a class of items (e.g. ,chicken),is because:

The change in quantity supplied that results from a change in price is known as the:

For any horizontal demand curve,the calculated price elasticity of demand is:

Suppose the price P on a given demand curve results in a price elasticity of demand equal to 1.Any price higher than P will lie on the _ part of the demand curve,and any price lower than P will lie on the _ part of the demand curve.

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

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

If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent,then the price elasticity of demand has a value of:

The responsiveness of quantity demanded for one good when the price of a different good changes is measured by the:

The following graph depicts demand. Refer to the figure above.The slope of the demand curve (if you ignore the negative sign)is:

For which of the following products is income elasticity likely to be greatest?

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

Filters

Exam 4: Elasticity

Suppose that the price elasticity of supply for the Hope Diamond is zero.Therefore,the supply curve for the Hope Diamond is:

Suppose the price price P gives us a price elasticity of demand equal to 1.It is on the ______ portion of the demand curve.

When the price of NBA ticket is $25 each,30,000 tickets are sold every game.After the price rises to $30 each,20,000 tickets are sold every game.At the original price,the demand for NBA ticket is:

Firms that produce goods with few or no substitutes will find that:

The price elasticity of demand for a good is the response of:

At the price of $20 each,demand for T-shirts for students group's fundraising activity is unitary elastic.Total expenditure for T-shirts reaches ______ at a price of $20 each.

For which of the following products is demand likely to be least price elastic?

The reason a brand name item (e.g. ,Tyson chicken)has a larger price elasticity than a class of items (e.g. ,chicken),is because:

The change in quantity supplied that results from a change in price is known as the:

For any horizontal demand curve,the calculated price elasticity of demand is:

Suppose the price P on a given demand curve results in a price elasticity of demand equal to 1.Any price higher than P will lie on the _______ part of the demand curve,and any price lower than P will lie on the _______ part of the demand curve.

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

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

If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent,then the price elasticity of demand has a value of:

The responsiveness of quantity demanded for one good when the price of a different good changes is measured by the:

The following graph depicts demand. Refer to the figure above.The slope of the demand curve (if you ignore the negative sign)is:

For which of the following products is income elasticity likely to be greatest?

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

Filters

Suppose the price P on a given demand curve results in a price elasticity of demand equal to 1.Any price higher than P will lie on the _ part of the demand curve,and any price lower than P will lie on the _ part of the demand curve.