Question 1

The imposition of an excise tax on a service will _____ the supply of that service.

Accepted Answer

lower

Question 2

When the cross elasticity of demand for two services is positive,then these services are _________.

Accepted Answer

A) complements 
B) substitutes 
C) both complements and substitutes 
D) neither complements nor substitutes 
A) complements 
B) substitutes 
C) both complements and substitutes 
D) neither complements nor substitutes B

Question 3

If price rises from $2 to $3 and the quantity demanded falls from 100 to 99,demand would be

Accepted Answer

A) 0.03 
B) 0.67 
C) 1.23 
D) 5.81 
A) 0.03 
B) 0.67 
C) 1.23 
D) 5.81 A

Question 4

Which statement is true?

Accepted Answer

A) Sales of kosher foods became more elastic from 1996 to 2002 because the products have begun to be purchased for health reasons as well as religious reasons. 
B) Higher taxes on cigarettes have virtually no effect in reducing sales. 
C) Advertising can shift a demand curve but has no real effect on elasticity. 
D) None of these statements are true. 
A) Sales of kosher foods became more elastic from 1996 to 2002 because the products have begun to be purchased for health reasons as well as religious reasons. 
B) Higher taxes on cigarettes have virtually no effect in reducing sales. 
C) Advertising can shift a demand curve but has no real effect on elasticity. 
D) None of these statements are true.

Question 5

What is the key difference between the short-run and long-run in terms of elasticity of supply?

Accepted Answer

A) Fixed productive capacity 
B) Labor changes 
C) No changes can be made to capital or labor 
D) No difference 
A) Fixed productive capacity 
B) Labor changes 
C) No changes can be made to capital or labor 
D) No difference

Question 6

If demand and supply have the same elasticity,the seller will pay ________ of a tax.

Accepted Answer

The answer of If demand and supply have the same...

Question 7

Movement from the lower to the upper range of a downward-sloping straight-line demand curve indicates that demand is becoming

Accepted Answer

A) easier to estimate. 
B) more inelastic. 
C) harder to estimate. 
D) more elastic. 
A) easier to estimate. 
B) more inelastic. 
C) harder to estimate. 
D) more elastic.

Question 8

-How much is the tax?

Accepted Answer

A) $8 
B) $6 
C) $4 
D) $2 
A) $8 
B) $6 
C) $4 
D) $2

Question 9

A sharp increase in the price of gasoline

Accepted Answer

A) will reduce daily gas consumption by more tomorrow than it will six months from now. 
B) will reduce gasoline consumption more six months from now than it will tomorrow. 
C) will cause an increase in quantity of gasoline demanded if demand is perfectly inelastic. 
D) will cause an increase in the quantity of gasoline demanded if demand is perfectly elastic. 
A) will reduce daily gas consumption by more tomorrow than it will six months from now. 
B) will reduce gasoline consumption more six months from now than it will tomorrow. 
C) will cause an increase in quantity of gasoline demanded if demand is perfectly inelastic. 
D) will cause an increase in the quantity of gasoline demanded if demand is perfectly elastic.

Question 10

Which of these has the most elastic demand?

Accepted Answer

A) Filet Mignon steak 
B) Bread 
C) Heart medicine 
D) Insulin (diabetes medicine) 
A) Filet Mignon steak 
B) Bread 
C) Heart medicine 
D) Insulin (diabetes medicine)

Question 11

Which of the following statements best represents the attitude of a consumer with a very elastic demand for golf clubs?

Accepted Answer

A) "The set of clubs that professional golfer Arnold Palmer use,are what I'll be swinging when I hit the golf course." 
B) "I'm generally pretty frugal,but I need all the help I can get when I meet with my weekly foursome.If one brand can give me an edge,the extra money is well spent." 
C) "I buy the brand of clubs I've used all my life.They've been good to me,so why would I even consider a bargain set of clubs?" 
D) "One golf club is as good as the next.It's the player not the club,so I don't get wrapped up in buying one brand of clubs over another." 
A) "The set of clubs that professional golfer Arnold Palmer use,are what I'll be swinging when I hit the golf course." 
B) "I'm generally pretty frugal,but I need all the help I can get when I meet with my weekly foursome.If one brand can give me an edge,the extra money is well spent." 
C) "I buy the brand of clubs I've used all my life.They've been good to me,so why would I even consider a bargain set of clubs?" 
D) "One golf club is as good as the next.It's the player not the club,so I don't get wrapped up in buying one brand of clubs over another."

Question 12

Which statement is false?

Accepted Answer

A) In the market period,industry supply is either perfectly inelastic or very inelastic. 
B) In the short run,an increase in demand cannot lead to an increase in a firm's output. 
C) If an increase in demand is considered to be long lasting,new firms will tend to enter the industry. 
D) Supply is most elastic in the long run. 
A) In the market period,industry supply is either perfectly inelastic or very inelastic. 
B) In the short run,an increase in demand cannot lead to an increase in a firm's output. 
C) If an increase in demand is considered to be long lasting,new firms will tend to enter the industry. 
D) Supply is most elastic in the long run.

Question 13

An elasticity that would be considered only slightly inelastic would be

Accepted Answer

A) 0.1. 
B) 0.9. 
C) 1.0. 
D) 1.1. 
A) 0.1. 
B) 0.9. 
C) 1.0. 
D) 1.1.

Question 14

Statement I: A perfectly inelastic demand curve and a perfectly elastic supply curve are represented the same way on a graph.
Statement II: A perfectly elastic demand curve and a perfectly elastic supply curve are represented the same way on a graph.

Accepted Answer

A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false. 
A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false.

Question 15

If demand for a good is very in elastic,make up a number to represent its elasticity._____

Accepted Answer

002 (or an

Question 16

When demand is perfectly inelastic the buyer pays _____ of a tax.

Accepted Answer

A) all 
B) most 
C) half 
D) less than half 
E) none 
A) all 
B) most 
C) half 
D) less than half 
E) none

Question 17

A tax increase _________ supply.

Accepted Answer

The answer of A tax increase _________ supply....

Question 18

Which product will have the most elastic demand curve?

Accepted Answer

A) Thread 
B) Heating oil 
C) A new automobile 
D) Cigarettes 
A) Thread 
B) Heating oil 
C) A new automobile 
D) Cigarettes

Question 19

If elasticity of demand is 0.1,a 1% increase in price will lower quantity demanded by

Accepted Answer

A) 0.01%. 
B) 0.1%. 
C) 1.0%. 
D) 10%. 
E) 100%. 
A) 0.01%. 
B) 0.1%. 
C) 1.0%. 
D) 10%. 
E) 100%.

Question 20

In general,the more the substitutes available for a good

Accepted Answer

A) the more inelastic the demand for the good. 
B) the more elastic the demand for the good. 
C) the greater the demand for the good. 
D) the less the demand for the good. 
A) the more inelastic the demand for the good. 
B) the more elastic the demand for the good. 
C) the greater the demand for the good. 
D) the less the demand for the good.

Exam 18: The Price Elasticities of Demand and Supply

The imposition of an excise tax on a service will _____ the supply of that service.

When the cross elasticity of demand for two services is positive,then these services are _________.

If price rises from $2 to $3 and the quantity demanded falls from 100 to 99,demand would be

Which statement is true?

What is the key difference between the short-run and long-run in terms of elasticity of supply?

If demand and supply have the same elasticity,the seller will pay ________ of a tax.

Movement from the lower to the upper range of a downward-sloping straight-line demand curve indicates that demand is becoming

-How much is the tax?

A sharp increase in the price of gasoline

Which of these has the most elastic demand?

Which of the following statements best represents the attitude of a consumer with a very elastic demand for golf clubs?

Which statement is false?

An elasticity that would be considered only slightly inelastic would be

Statement I: A perfectly inelastic demand curve and a perfectly elastic supply curve are represented the same way on a graph. Statement II: A perfectly elastic demand curve and a perfectly elastic supply curve are represented the same way on a graph.

If demand for a good is very in elastic,make up a number to represent its elasticity._____

When demand is perfectly inelastic the buyer pays _____ of a tax.

A tax increase _________ supply.

Which product will have the most elastic demand curve?

If elasticity of demand is 0.1,a 1% increase in price will lower quantity demanded by

In general,the more the substitutes available for a good

A Brief Economic History of the United States

Resource Utilization

The Mixed Economy

Supply and Demand

The Household Consumption Sector

The Business Investment Sector

The Government Sector

The Export-Import Sector

Gross Domestic Product

Economic Fluctuations, unemployment, and Inflation

Classical and Keynesian Economics

Fiscal Policy and the National Debt

Money and Banking

The Federal Reserve and Monetary Policy

A Century of Economic Theory

Economic Growth and Productivity

Demand,supply,and Equilibrium

Theory of Consumer Behavior

Cost

Profit, loss, and Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Corporate Mergers and Antitrust

Demand in the Factor Market

Labor Unions

Labor Markets and Wage Rates

Rent, interest, and Profit

Income Distribution and Poverty

International Trade

International Finance

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