Question 1

If the percentage change in quantity is less than the percentage change in price, demand is said to be price inelastic.

Accepted Answer

A) True 
 B)False

Question 2

The concept of price elasticity of demand is most closely related to:

Accepted Answer

A)  the law of demand. 
B)  the equilibrium price. 
C)  the equilibrium quantity. 
D)  a shift in the demand curve. 
A)  the law of demand. 
B)  the equilibrium price. 
C)  the equilibrium quantity. 
D)  a shift in the demand curve.

Question 3

If a demand curve has a price elasticity coefficient equal to negative 1 throughout, then the slope of the demand curve is also negative 1 throughout.

Accepted Answer

A) True 
 B)False

Question 4

If income increases and the consumption of bagels increases, bagels are considered a(n):

Accepted Answer

A)  negative good. 
B)  positive good. 
C)  inferior good. 
D)  normal good. 
A)  negative good. 
B)  positive good. 
C)  inferior good. 
D)  normal good.

Question 5

If the total revenue received by a firm decreases when it raises its price, this indicates that the demand for the firm's product is:

Accepted Answer

A)  unstable. 
B)  price inelastic. 
C)  price elastic. 
D)  unit price elastic. 
A)  unstable. 
B)  price inelastic. 
C)  price elastic. 
D)  unit price elastic.

Question 6

If the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity demanded increases from 190 bags to 210 bags, this indicates that, if other things are unchanged, the price elasticity of demand is:

Accepted Answer

A)  0. 
B)  -0.5. 
C)  -1. 
D)  -2. 
A)  0. 
B)  -0.5. 
C)  -1. 
D)  -2.

Question 7

The income elasticity of demand of an inferior good:

Accepted Answer

A)  is less than 0. 
B)  is equal to 0. 
C)  is greater than 0. 
D)  could be any one of the above. 
A)  is less than 0. 
B)  is equal to 0. 
C)  is greater than 0. 
D)  could be any one of the above.

Question 8

If the University of Michigan increases the price of football tickets, it will result in increasing revenues if the price elasticity of demand is

Accepted Answer

A)  price inelastic. 
B)  price elastic. 
C)  equal to -1. 
D)  equal to -1.8. 
A)  price inelastic. 
B)  price elastic. 
C)  equal to -1. 
D)  equal to -1.8.

Question 9

Demand is price inelastic when:

Accepted Answer

A)  price falls and total revenue decreases. 
B)  price increases and total revenue decreases. 
C)  price decreases and total revenue stays the same. 
D)  price decreases and total revenue goes up. 
A)  price falls and total revenue decreases. 
B)  price increases and total revenue decreases. 
C)  price decreases and total revenue stays the same. 
D)  price decreases and total revenue goes up.

Question 10

There are several close substitutes for Bayer aspirin but fewer substitutes for a complete medical examination.Therefore, you would expect the demand for:

Accepted Answer

A)  medical exams to be more price elastic. 
B)  Bayer aspirin to be more price elastic. 
C)  Bayer aspirin to be more price inelastic. 
D)  both to be equally price elastic. 
A)  medical exams to be more price elastic. 
B)  Bayer aspirin to be more price elastic. 
C)  Bayer aspirin to be more price inelastic. 
D)  both to be equally price elastic.

Question 11

The cross price elasticity of demand for substitute goods is:

Accepted Answer

A)  negative. 
B)  positive. 
C)  equal to 1. 
D)  positive only for normal goods. 
A)  negative. 
B)  positive. 
C)  equal to 1. 
D)  positive only for normal goods.

Question 12

A product that has good substitutes is likely to have a higher price elasticity of demand than one that does not.

Accepted Answer

A) True 
 B)False

Question 13

Income elasticity of demand measures the response of the change in quantity demanded at a specific price to a change in income.

Accepted Answer

A) True 
 B)False

Question 14

When the percentage change in quantity demanded is larger than the percentage change in price, demand is said to be:

Accepted Answer

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

Question 15

Use the following to answer question(s): Demand and Price Elasticity 2
  
-(Exhibit: Demand and Price Elasticity 2) Price elasticity of demand for small changes in price in the neighborhood of point C:

Accepted Answer

A)  is 4. 
B)  is -4. 
C)  is -1. 
D)  cannot be determined. 
A)  is 4. 
B)  is -4. 
C)  is -1. 
D)  cannot be determined.

If the percentage change in quantity is less than the percentage change in price, demand is said to be price inelastic.

The concept of price elasticity of demand is most closely related to:

If a demand curve has a price elasticity coefficient equal to negative 1 throughout, then the slope of the demand curve is also negative 1 throughout.

If income increases and the consumption of bagels increases, bagels are considered a(n):

If the total revenue received by a firm decreases when it raises its price, this indicates that the demand for the firm's product is:

If the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity demanded increases from 190 bags to 210 bags, this indicates that, if other things are unchanged, the price elasticity of demand is:

The income elasticity of demand of an inferior good:

If the University of Michigan increases the price of football tickets, it will result in increasing revenues if the price elasticity of demand is

Demand is price inelastic when:

There are several close substitutes for Bayer aspirin but fewer substitutes for a complete medical examination.Therefore, you would expect the demand for:

The cross price elasticity of demand for substitute goods is:

A product that has good substitutes is likely to have a higher price elasticity of demand than one that does not.

Income elasticity of demand measures the response of the change in quantity demanded at a specific price to a change in income.

When the percentage change in quantity demanded is larger than the percentage change in price, demand is said to be:

Use the following to answer question(s): Demand and Price Elasticity 2 -(Exhibit: Demand and Price Elasticity 2) Price elasticity of demand for small changes in price in the neighborhood of point C:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

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Exam 5: Elasticity: a Measure of Response

If the percentage change in quantity is less than the percentage change in price, demand is said to be price inelastic.

The concept of price elasticity of demand is most closely related to:

If a demand curve has a price elasticity coefficient equal to negative 1 throughout, then the slope of the demand curve is also negative 1 throughout.

If income increases and the consumption of bagels increases, bagels are considered a(n):

If the total revenue received by a firm decreases when it raises its price, this indicates that the demand for the firm's product is:

If the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity demanded increases from 190 bags to 210 bags, this indicates that, if other things are unchanged, the price elasticity of demand is:

The income elasticity of demand of an inferior good:

If the University of Michigan increases the price of football tickets, it will result in increasing revenues if the price elasticity of demand is

Demand is price inelastic when:

There are several close substitutes for Bayer aspirin but fewer substitutes for a complete medical examination.Therefore, you would expect the demand for:

The cross price elasticity of demand for substitute goods is:

A product that has good substitutes is likely to have a higher price elasticity of demand than one that does not.

Income elasticity of demand measures the response of the change in quantity demanded at a specific price to a change in income.

When the percentage change in quantity demanded is larger than the percentage change in price, demand is said to be:

Use the following to answer question(s): Demand and Price Elasticity 2 -(Exhibit: Demand and Price Elasticity 2) Price elasticity of demand for small changes in price in the neighborhood of point C:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters