Question 1

The price elasticity of demand is measured by:

Accepted Answer

A)  dividing the percentage change in price by the percentage change in quantity demanded. 
B)  dividing the percentage change in quantity demanded by the percentage change in price. 
C)  subtracting the percentage change in price from the percentage in quantity demanded. 
D)  adding the percentage change in price to the percentage change in quantity demanded. 
A)  dividing the percentage change in price by the percentage change in quantity demanded. 
B)  dividing the percentage change in quantity demanded by the percentage change in price. 
C)  subtracting the percentage change in price from the percentage in quantity demanded. 
D)  adding the percentage change in price to the percentage change in quantity demanded.

Question 2

The cross price elasticity of demand of complementary goods is:

Accepted Answer

A)  less than 0. 
B)  equal to 0. 
C)  greater than 0. 
D)  between 0 and 1. 
A)  less than 0. 
B)  equal to 0. 
C)  greater than 0. 
D)  between 0 and 1.

Question 3

Based on the determinants of the price elasticity of demand, discuss the relative price elasticity of demand for sugar, carrots, agricultural output in general, ballpoint pens, Rolex watches, and porterhouse steaks.

Accepted Answer

The price elasticity of demand for sugar

Question 4

According to the Case in Point on Conventional and Organic Milk: ?

Accepted Answer

A)  neither organic milk nor conventional milk is an inferior good. 
B)  organic milk is an inferior good. 
C)  conventional milk is an inferior good. 
D)  both organic milk and conventional milk are inferior goods. 
A)  neither organic milk nor conventional milk is an inferior good. 
B)  organic milk is an inferior good. 
C)  conventional milk is an inferior good. 
D)  both organic milk and conventional milk are inferior goods.

Question 5

Use the following to answer question(s):  
-(Exhibit: Demand and Price Elasticity 1) What is the price elasticity of demand between $2.50 and $2.25?

Accepted Answer

A)  -9 
B)  -19 
C)  indeterminate 
D)  none of the above 
A)  -9 
B)  -19 
C)  indeterminate 
D)  none of the above

Question 6

If a university decreases the price of tickets to football games in order to collect more revenue, it is assuming that the demand for tickets 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 7

Use the following to answer question(s): Demand and Price Elasticity 2
  
-(Exhibit: Demand and Price Elasticity 2) From the graph it can be seen that, along a given segment of the demand curve, if price falls and total revenue _________, then demand is price elastic.

Accepted Answer

A)  increases 
B)  decreases 
C)  stays the same 
D)  decreases at first and then increases 
A)  increases 
B)  decreases 
C)  stays the same 
D)  decreases at first and then increases

Question 8

The income elasticity of demand for ground beef has been estimated to be -0.197.If income drops by 10 percent in a period, how will that affect demand for ground beef in that period, all other things unchanged?

Accepted Answer

A)  demand will increase by less than 1.97 percent 
B)  demand will increase by 1.97 percent 
C)  demand will decrease 
D)  demand won't change, but quantity demanded will decrease by 1.97 percent 
A)  demand will increase by less than 1.97 percent 
B)  demand will increase by 1.97 percent 
C)  demand will decrease 
D)  demand won't change, but quantity demanded will decrease by 1.97 percent

Question 9

If the price of emergency visits to the doctor were to rise, we would expect:

Accepted Answer

A)  a significant decline in the number of emergency visits to the doctor. 
B)  only a slight decline is the number of emergency visits to the doctor. 
C)  the number of emergency visits to the doctor to stay the same. 
D)  the total income of doctors to fall dramatically. 
A)  a significant decline in the number of emergency visits to the doctor. 
B)  only a slight decline is the number of emergency visits to the doctor. 
C)  the number of emergency visits to the doctor to stay the same. 
D)  the total income of doctors to fall dramatically.

Question 10

Use the following to answer question(s): Demand for Shirts
  
-(Exhibit: Demand for Shirts) The price elasticity of demand for the segment CD is:

Accepted Answer

A)  greater than 1 (absolute value). 
B)  -1. 
C)  -0.71. 
D)  -0.29. 
A)  greater than 1 (absolute value). 
B)  -1. 
C)  -0.71. 
D)  -0.29.

Question 11

Suppose that the cross price elasticity of demand for Mountain Dew with respect to the price of Coke is 0.7.A 10 percent increase in the price of Coke would:

Accepted Answer

A)  reduce the demand for Mountain Dew by 10 percent. 
B)  reduce the demand for Mountain Dew by 7 percent. 
C)  increase the demand for Mountain Dew by 7 percent. 
D)  increase the demand for Mountain Dew by 10 percent. 
A)  reduce the demand for Mountain Dew by 10 percent. 
B)  reduce the demand for Mountain Dew by 7 percent. 
C)  increase the demand for Mountain Dew by 7 percent. 
D)  increase the demand for Mountain Dew by 10 percent.

Question 12

Use the following for questions 116-119.
Exhibit: The Demand for Macintosh Computers
  
-(Exhibit: Demand for Macintosh Computers) The change in the firm's total revenue resulting from a change in price from T to P suggests that demand is:

Accepted Answer

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

Question 13

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

Accepted Answer

A)  the equilibrium price. 
B)  the equilibrium quantity. 
C)  a movement along the demand curve. 
D)  a shift in the demand curve. 
A)  the equilibrium price. 
B)  the equilibrium quantity. 
C)  a movement along the demand curve. 
D)  a shift in the demand curve.

Question 14

Use the following to answer question(s): Demand and Price Elasticity 2
  
-(Exhibit: Demand and Price Elasticity 2) The demand curve going from point D to E:

Accepted Answer

A)  is price inelastic. 
B)  is price elastic. 
C)  has a slope of +1. 
D)  has a slope of -2. 
A)  is price inelastic. 
B)  is price elastic. 
C)  has a slope of +1. 
D)  has a slope of -2.

Question 15

A linear supply curve has a price elasticity coefficient equal to 1.

Accepted Answer

A) True 
 B)False

Question 16

The demand for agricultural output is price inelastic.This means that if farmers, taken collectively, have a bumper crop, they will experience:

Accepted Answer

A)  lower prices, greater quantities sold, and lower incomes. 
B)  higher prices, greater quantities sold, and higher incomes. 
C)  lower prices, quantities sold, and incomes. 
D)  higher prices, quantities sold, and incomes. 
A)  lower prices, greater quantities sold, and lower incomes. 
B)  higher prices, greater quantities sold, and higher incomes. 
C)  lower prices, quantities sold, and incomes. 
D)  higher prices, quantities sold, and incomes.

Question 17

The cross price elasticity of demand for poultry with respect to the price of ground beef has been estimated to be 0.23.If the price of ground beef falls by 20 percent in a period, how will that affect the demand for poultry in that period, all other things unchanged?

Accepted Answer

A)  The demand for poultry will rise. 
B)  The demand for poultry will remain unchanged. 
C)  The demand for ground beef will increase, but the demand for poultry will fall. 
D)  The demand for ground beef will not change, but the demand for poultry will fall. 
A)  The demand for poultry will rise. 
B)  The demand for poultry will remain unchanged. 
C)  The demand for ground beef will increase, but the demand for poultry will fall. 
D)  The demand for ground beef will not change, but the demand for poultry will fall.

Question 18

Use the following to answer question(s): Demand for Shirts
  
-(Exhibit: Demand for Shirts) The price elasticity of demand for the segment EF is:

Accepted Answer

A)  -1.3. 
B)  -1. 
C)  -0.7. 
D)  -0.33. 
A)  -1.3. 
B)  -1. 
C)  -0.7. 
D)  -0.33.

Question 19

Use the following to answer question(s): Demand and Price Elasticity 2
  
-(Exhibit: Demand and Price Elasticity 2) The price elasticity of demand between points A and B is:

Accepted Answer

A)  elastic, since total revenue falls when price falls from $8 to $6. 
B)  elastic, since total revenue increases when price falls from $8 to $6. 
C)  inelastic, since the percentage change in quantity is less than the percentage change in price when price falls from $8 to $6. 
D)  positive, because the slope is negative. 
A)  elastic, since total revenue falls when price falls from $8 to $6. 
B)  elastic, since total revenue increases when price falls from $8 to $6. 
C)  inelastic, since the percentage change in quantity is less than the percentage change in price when price falls from $8 to $6. 
D)  positive, because the slope is negative.

Question 20

The price elasticity of demand can be found by:

Accepted Answer

A)  examining only the slope of the demand curve. 
B)  measuring absolute changes in price and quantity demanded. 
C)  examining the relative percentage change in quantity demanded to the relative percentage change in price. 
D)  knowing that when price changes, the quantity demanded goes in the opposite direction. 
A)  examining only the slope of the demand curve. 
B)  measuring absolute changes in price and quantity demanded. 
C)  examining the relative percentage change in quantity demanded to the relative percentage change in price. 
D)  knowing that when price changes, the quantity demanded goes in the opposite direction.

The price elasticity of demand is measured by:

The cross price elasticity of demand of complementary goods is:

Based on the determinants of the price elasticity of demand, discuss the relative price elasticity of demand for sugar, carrots, agricultural output in general, ballpoint pens, Rolex watches, and porterhouse steaks.

According to the Case in Point on Conventional and Organic Milk: ?

Use the following to answer question(s): -(Exhibit: Demand and Price Elasticity 1) What is the price elasticity of demand between $2.50 and $2.25?

If a university decreases the price of tickets to football games in order to collect more revenue, it is assuming that the demand for tickets is:

Use the following to answer question(s): Demand and Price Elasticity 2 -(Exhibit: Demand and Price Elasticity 2) From the graph it can be seen that, along a given segment of the demand curve, if price falls and total revenue _________, then demand is price elastic.

The income elasticity of demand for ground beef has been estimated to be -0.197.If income drops by 10 percent in a period, how will that affect demand for ground beef in that period, all other things unchanged?

If the price of emergency visits to the doctor were to rise, we would expect:

Use the following to answer question(s): Demand for Shirts -(Exhibit: Demand for Shirts) The price elasticity of demand for the segment CD is:

Suppose that the cross price elasticity of demand for Mountain Dew with respect to the price of Coke is 0.7.A 10 percent increase in the price of Coke would:

Use the following for questions 116-119. Exhibit: The Demand for Macintosh Computers -(Exhibit: Demand for Macintosh Computers) The change in the firm's total revenue resulting from a change in price from T to P suggests that demand is:

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

Use the following to answer question(s): Demand and Price Elasticity 2 -(Exhibit: Demand and Price Elasticity 2) The demand curve going from point D to E:

A linear supply curve has a price elasticity coefficient equal to 1.

The demand for agricultural output is price inelastic.This means that if farmers, taken collectively, have a bumper crop, they will experience:

The cross price elasticity of demand for poultry with respect to the price of ground beef has been estimated to be 0.23.If the price of ground beef falls by 20 percent in a period, how will that affect the demand for poultry in that period, all other things unchanged?

Use the following to answer question(s): Demand for Shirts -(Exhibit: Demand for Shirts) The price elasticity of demand for the segment EF is:

Use the following to answer question(s): Demand and Price Elasticity 2 -(Exhibit: Demand and Price Elasticity 2) The price elasticity of demand between points A and B is:

The price elasticity of demand can be found by:

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

Exam 5: Elasticity: a Measure of Response

The price elasticity of demand is measured by:

The cross price elasticity of demand of complementary goods is:

Based on the determinants of the price elasticity of demand, discuss the relative price elasticity of demand for sugar, carrots, agricultural output in general, ballpoint pens, Rolex watches, and porterhouse steaks.

According to the Case in Point on Conventional and Organic Milk: ?

Use the following to answer question(s): -(Exhibit: Demand and Price Elasticity 1) What is the price elasticity of demand between $2.50 and $2.25?

If a university decreases the price of tickets to football games in order to collect more revenue, it is assuming that the demand for tickets is:

Use the following to answer question(s): Demand and Price Elasticity 2 -(Exhibit: Demand and Price Elasticity 2) From the graph it can be seen that, along a given segment of the demand curve, if price falls and total revenue _________, then demand is price elastic.

The income elasticity of demand for ground beef has been estimated to be -0.197.If income drops by 10 percent in a period, how will that affect demand for ground beef in that period, all other things unchanged?

If the price of emergency visits to the doctor were to rise, we would expect:

Use the following to answer question(s): Demand for Shirts -(Exhibit: Demand for Shirts) The price elasticity of demand for the segment CD is:

Suppose that the cross price elasticity of demand for Mountain Dew with respect to the price of Coke is 0.7.A 10 percent increase in the price of Coke would:

Use the following for questions 116-119. Exhibit: The Demand for Macintosh Computers -(Exhibit: Demand for Macintosh Computers) The change in the firm's total revenue resulting from a change in price from T to P suggests that demand is:

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

Use the following to answer question(s): Demand and Price Elasticity 2 -(Exhibit: Demand and Price Elasticity 2) The demand curve going from point D to E:

A linear supply curve has a price elasticity coefficient equal to 1.

The demand for agricultural output is price inelastic.This means that if farmers, taken collectively, have a bumper crop, they will experience:

The cross price elasticity of demand for poultry with respect to the price of ground beef has been estimated to be 0.23.If the price of ground beef falls by 20 percent in a period, how will that affect the demand for poultry in that period, all other things unchanged?

Use the following to answer question(s): Demand for Shirts -(Exhibit: Demand for Shirts) The price elasticity of demand for the segment EF is:

Use the following to answer question(s): Demand and Price Elasticity 2 -(Exhibit: Demand and Price Elasticity 2) The price elasticity of demand between points A and B is:

The price elasticity of demand can be found by:

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