Question 1

When the price elasticity of demand is -0.66,a decrease in price will

Accepted Answer

A)  lead to no changes in total revenue. 
B)  increase total revenue. 
C)  reduce total revenue. 
D)  decrease the quantity. 
E)  lead to no changes in quantity. 
A)  lead to no changes in total revenue. 
B)  increase total revenue. 
C)  reduce total revenue. 
D)  decrease the quantity. 
E)  lead to no changes in quantity.

Question 2

How does the price elasticity of demand at relatively high prices compare to the price elasticity of demand at relatively low prices? Calculate the price elasticity from $5 to $6 and the price elasticity from $1 to $2 in the accompanying graph.

Accepted Answer

Demand is relatively more elastic in the

Question 3

If the income elasticity of demand is 1.2,the good will be a(n)________ good.

Accepted Answer

A)  complement 
B)  substitute 
C)  necessity 
D)  inferior 
E)  luxury 
A)  complement 
B)  substitute 
C)  necessity 
D)  inferior 
E)  luxury

Question 4

A 15 percent increase in the price of cookies results in a 9 percent decrease in the quantity of cookies sold.The revenue received by cookie suppliers will ________ because the price elasticity of demand for cookies is ________.

Accepted Answer

A)  decrease; inelastic 
B)  increase; elastic 
C)  decrease; elastic 
D)  not change; unitary elastic 
E)  increase; inelastic 
A)  decrease; inelastic 
B)  increase; elastic 
C)  decrease; elastic 
D)  not change; unitary elastic 
E)  increase; inelastic

Question 5

When the total revenue is unchanged despite the change in price,demand is

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  unitary elastic. 
D)  horizontal. 
E)  vertical. 
A)  elastic. 
B)  inelastic. 
C)  unitary elastic. 
D)  horizontal. 
E)  vertical.

Question 6

Shawna wins the lottery and her income increases by 60 percent.She used to buy 10 pints of cottage cheese per month and now she buys 12 pints.Her income elasticity of demand for cottage cheese is ________,making it a(n)________ good.

Accepted Answer

A)  3; luxury 
B)  3.59; normal 
C)  0.33; necessity 
D)  0.28; inferior 
E)  -0.33; inferior 
A)  3; luxury 
B)  3.59; normal 
C)  0.33; necessity 
D)  0.28; inferior 
E)  -0.33; inferior

Question 7

Income elasticity refers to

Accepted Answer

A)  percentage change in quantity demanded divided by the percentage change in price. 
B)  movement down along a demand curve. 
C)  movement up along a demand curve. 
D)  horizontal shift of a demand curve. 
E)  vertical shift of a demand curve. 
A)  percentage change in quantity demanded divided by the percentage change in price. 
B)  movement down along a demand curve. 
C)  movement up along a demand curve. 
D)  horizontal shift of a demand curve. 
E)  vertical shift of a demand curve.

Question 8

The Sunny Softball league found that when it changed its ticket prices from $10 to $5,there was a more than proportional but not infinite increase in attendance.The price elasticity of demand is

Accepted Answer

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

Question 9

Use the following scenario to answer the following questions: Dairy Wishes,a local ice cream store,finds that it sells out of ice cream sandwiches at the current price of $1.It raises the price to increase its revenues and finds that no one buys ice cream sandwiches anymore.
-The demand for ice cream sandwiches is

Accepted Answer

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

Question 10

The responsiveness of demand to changes in income while holding the good's relative price constant is

Accepted Answer

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

Question 11

Kenji tells the manager at Moo's Ice Cream that he won't buy any ice cream cones costing more than $2,but he will buy a limitless number at any price less than $2.His price elasticity of demand for ice cream cones is

Accepted Answer

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

Question 12

For which of the following products should sellers raise the price in order to increase total revenue from college students?

Accepted Answer

A)  blue hooded sweatshirts 
B)  Gatorade 
C)  concert tickets 
D)  textbooks 
E)  spaghetti sauce 
A)  blue hooded sweatshirts 
B)  Gatorade 
C)  concert tickets 
D)  textbooks 
E)  spaghetti sauce

Question 13

Lee says that he will always spend $20 a week on lattes.Lee's demand for lattes is price

Accepted Answer

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

Question 14

When the demand curve is vertical

Accepted Answer

A)  the price elasticity of demand is negative. 
B)  the price elasticity of demand is positive. 
C)  the demand for the good is perfectly elastic. 
D)  the price elasticity of demand is equal to zero. 
E)  the price elasticity of demand is equal to -1. 
A)  the price elasticity of demand is negative. 
B)  the price elasticity of demand is positive. 
C)  the demand for the good is perfectly elastic. 
D)  the price elasticity of demand is equal to zero. 
E)  the price elasticity of demand is equal to -1.

Question 15

If the cross-price elasticity of demand between Good A and Good B is 3,the price of Good B increases,and the price elasticity of demand for Good B is inelastic,we can expect to see a(n)________ change in the quantity demanded for Good A.

Accepted Answer

A)  zero 
B)  small 
C)  infinite 
D)  one-for-one 
E)  large 
A)  zero 
B)  small 
C)  infinite 
D)  one-for-one 
E)  large

Question 16

If a friend says,"I am never going to buy another Avicii remix again!" his or her price elasticity of demand for Avicii remixes is

Accepted Answer

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

Question 17

If the elasticity of demand for Good A is -3,a 33 percent decrease in quantity demanded of Good A results from a(n)________ in the price of Good A.

Accepted Answer

A)  99 percent decrease 
B)  99 percent increase 
C)  11 percent decrease 
D)  11 percent increase 
E)  33 percent decrease 
A)  99 percent decrease 
B)  99 percent increase 
C)  11 percent decrease 
D)  11 percent increase 
E)  33 percent decrease

Question 18

If the income elasticity of demand for noodles is -2 and the percentage change in the quantity consumed is 5 percent,what is the percentage change in income?

Accepted Answer

A)  2.5 percent 
B)  10 percent 
C)  -2.5 percent 
D)  -10 percent 
E)  -0.4 percent 
A)  2.5 percent 
B)  10 percent 
C)  -2.5 percent 
D)  -10 percent 
E)  -0.4 percent

Question 19

If the supply of a good is perfectly inelastic,then the price elasticity of supply will equal

Accepted Answer

A)  zero. 
B)  one. 
C)  greater than zero but less than one. 
D)  greater than one but less than infinity. 
E)  negative one. 
A)  zero. 
B)  one. 
C)  greater than zero but less than one. 
D)  greater than one but less than infinity. 
E)  negative one.

Question 20

When quantity demanded and price increase by 10 percent,you know that price and quantity are ________ to the consumer.

Accepted Answer

A)  equally important 
B)  everything 
C)  nothing 
D)  relatively important 
E)  relatively unimportant 
A)  equally important 
B)  everything 
C)  nothing 
D)  relatively important 
E)  relatively unimportant

When the price elasticity of demand is -0.66,a decrease in price will

How does the price elasticity of demand at relatively high prices compare to the price elasticity of demand at relatively low prices? Calculate the price elasticity from $5 to $6 and the price elasticity from $1 to $2 in the accompanying graph.

If the income elasticity of demand is 1.2,the good will be a(n)________ good.

A 15 percent increase in the price of cookies results in a 9 percent decrease in the quantity of cookies sold.The revenue received by cookie suppliers will because the price elasticity of demand for cookies is .

When the total revenue is unchanged despite the change in price,demand is

Shawna wins the lottery and her income increases by 60 percent.She used to buy 10 pints of cottage cheese per month and now she buys 12 pints.Her income elasticity of demand for cottage cheese is ,making it a(n) good.

Income elasticity refers to

The Sunny Softball league found that when it changed its ticket prices from $10 to $5,there was a more than proportional but not infinite increase in attendance.The price elasticity of demand is

The responsiveness of demand to changes in income while holding the good's relative price constant is

Kenji tells the manager at Moo's Ice Cream that he won't buy any ice cream cones costing more than $2,but he will buy a limitless number at any price less than $2.His price elasticity of demand for ice cream cones is

For which of the following products should sellers raise the price in order to increase total revenue from college students?

Lee says that he will always spend $20 a week on lattes.Lee's demand for lattes is price

When the demand curve is vertical

If the cross-price elasticity of demand between Good A and Good B is 3,the price of Good B increases,and the price elasticity of demand for Good B is inelastic,we can expect to see a(n)________ change in the quantity demanded for Good A.

If a friend says,"I am never going to buy another Avicii remix again!" his or her price elasticity of demand for Avicii remixes is

If the elasticity of demand for Good A is -3,a 33 percent decrease in quantity demanded of Good A results from a(n)________ in the price of Good A.

If the income elasticity of demand for noodles is -2 and the percentage change in the quantity consumed is 5 percent,what is the percentage change in income?

If the supply of a good is perfectly inelastic,then the price elasticity of supply will equal

When quantity demanded and price increase by 10 percent,you know that price and quantity are ________ to the consumer.

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

International Trade

Filters

Exam 4: Elasticity

When the price elasticity of demand is -0.66,a decrease in price will

How does the price elasticity of demand at relatively high prices compare to the price elasticity of demand at relatively low prices? Calculate the price elasticity from $5 to $6 and the price elasticity from $1 to $2 in the accompanying graph.

If the income elasticity of demand is 1.2,the good will be a(n)________ good.

A 15 percent increase in the price of cookies results in a 9 percent decrease in the quantity of cookies sold.The revenue received by cookie suppliers will ________ because the price elasticity of demand for cookies is ________.

When the total revenue is unchanged despite the change in price,demand is

Shawna wins the lottery and her income increases by 60 percent.She used to buy 10 pints of cottage cheese per month and now she buys 12 pints.Her income elasticity of demand for cottage cheese is ________,making it a(n)________ good.

Income elasticity refers to

The Sunny Softball league found that when it changed its ticket prices from $10 to $5,there was a more than proportional but not infinite increase in attendance.The price elasticity of demand is

The responsiveness of demand to changes in income while holding the good's relative price constant is

Kenji tells the manager at Moo's Ice Cream that he won't buy any ice cream cones costing more than $2,but he will buy a limitless number at any price less than $2.His price elasticity of demand for ice cream cones is

For which of the following products should sellers raise the price in order to increase total revenue from college students?

Lee says that he will always spend $20 a week on lattes.Lee's demand for lattes is price

When the demand curve is vertical

If the cross-price elasticity of demand between Good A and Good B is 3,the price of Good B increases,and the price elasticity of demand for Good B is inelastic,we can expect to see a(n)________ change in the quantity demanded for Good A.

If a friend says,"I am never going to buy another Avicii remix again!" his or her price elasticity of demand for Avicii remixes is

If the elasticity of demand for Good A is -3,a 33 percent decrease in quantity demanded of Good A results from a(n)________ in the price of Good A.

If the income elasticity of demand for noodles is -2 and the percentage change in the quantity consumed is 5 percent,what is the percentage change in income?

If the supply of a good is perfectly inelastic,then the price elasticity of supply will equal

When quantity demanded and price increase by 10 percent,you know that price and quantity are ________ to the consumer.

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

International Trade

Filters

A 15 percent increase in the price of cookies results in a 9 percent decrease in the quantity of cookies sold.The revenue received by cookie suppliers will because the price elasticity of demand for cookies is .

Shawna wins the lottery and her income increases by 60 percent.She used to buy 10 pints of cottage cheese per month and now she buys 12 pints.Her income elasticity of demand for cottage cheese is ,making it a(n) good.