Question 1

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 2

If the elasticity of demand for a service is 0.4 and price is raised,

Accepted Answer

A) total revenue will fall. 
B) total revenue will rise. 
C) total revenue will stay the same. 
D) there is no way to determine whether total revenue will rise, fall, or remain the same. 
A) total revenue will fall. 
B) total revenue will rise. 
C) total revenue will stay the same. 
D) there is no way to determine whether total revenue will rise, fall, or remain the same.

Question 3

If the elasticity for yachts is three, a tax on yachts will ___________ total revenue.

Accepted Answer

The answer of If the elasticity for yachts is three,...

Question 4

Cross elasticity of demand measures the response in

Accepted Answer

A) the quantity of one good demanded to a change in the price of another good. 
B) the income of consumers to the change in the price of goods. 
C) the price of a good to a change in the quantity of another good demanded. 
D) quantity of one good demanded when the quantity demanded of another good changes. 
A) the quantity of one good demanded to a change in the price of another good. 
B) the income of consumers to the change in the price of goods. 
C) the price of a good to a change in the quantity of another good demanded. 
D) quantity of one good demanded when the quantity demanded of another good changes.

Question 5

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 6

When the price of CD players increases 5%, quantity demanded decreases 5%. The price elasticity for CD players is

Accepted Answer

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

Question 7

Use the following Figure to answer the question :  
-How much is the tax?

Accepted Answer

A) 10 cents 
B) 20 cents 
C) 30 cents 
D) 40 cents 
E) 50 cents 
A) 10 cents 
B) 20 cents 
C) 30 cents 
D) 40 cents 
E) 50 cents

Question 8

A perfectly inelastic demand curve is

Accepted Answer

A) a vertical line. 
B) a horizontal line. 
C) a line that slopes downward to the right. 
D) a line that slopes upward to the right. 
A) a vertical line. 
B) a horizontal line. 
C) a line that slopes downward to the right. 
D) a line that slopes upward to the right.

Question 9

Use the following Figure to answer the question :  
-The consumer will pay for ______ of the tax and the seller will pay for ______ of the tax.

Accepted Answer

A) some; some 
B) most; a little 
C) all; none 
D) none; all 
A) some; some 
B) most; a little 
C) all; none 
D) none; all

Question 10

Advertisers go to great lengths to build brand loyalty because

Accepted Answer

A) it makes their product more elastic. 
B) it makes their product more inelastic. 
C) it shifts its supply curve to the right. 
D) it shifts its demand curve to the left. 
A) it makes their product more elastic. 
B) it makes their product more inelastic. 
C) it shifts its supply curve to the right. 
D) it shifts its demand curve to the left.

Question 11

An elasticity of 1.5 means that a 1% change in price will lead to a _____% change in quantity demanded.

Accepted Answer

A) 0.5 
B) 1.0 
C) 1.5 
D) 3.0 
E) 15 
A) 0.5 
B) 1.0 
C) 1.5 
D) 3.0 
E) 15

Question 12

Statement I: Over time the demand for most goods becomes more elastic. Statement II: The more uses a product has, the less elastic its demand.

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 13

A.How much is the tax in the above graph?
B.How much of this tax is borne by the buyer and how much is borne by the seller?
C.As a result of the tax, by about how much does consumption fall?

Accepted Answer

(a) $4
(b) Buyer pay

Question 14

If the price of chocolate goes up 20% and quantity demanded falls by 5%, demand is ______.

Accepted Answer

The answer of If the price of chocolate goes up...

Question 15

Draw another supply curve S to indicate a $1 tax increase. (a) How much of this tax is borne by the buyer? (b) How much of this tax is borne by the seller?

Accepted Answer

The answer of Draw another supply curve S to indicate...

Question 16

Use the following figure to answer the question : 
 
-In general taxes on goods and services

Accepted Answer

A) are borne mainly by consumers. 
B) are borne mainly by sellers. 
C) are borne equally by consumers and sellers. 
D) may be paid mainly or entirely by buyers or it may be paid mainly or entirely by sellers, or may be paid equally by buyers and sellers. 
A) are borne mainly by consumers. 
B) are borne mainly by sellers. 
C) are borne equally by consumers and sellers. 
D) may be paid mainly or entirely by buyers or it may be paid mainly or entirely by sellers, or may be paid equally by buyers and sellers.

Question 17

If the income elasticity for Ramen Noodles is -3.0, we may conclude that Ramen Noodles are _________.

Accepted Answer

A) a normal good 
B) an inferior good 
C) both a normal good and an inferior good 
D) neither a normal good nor an inferior good 
A) a normal good 
B) an inferior good 
C) both a normal good and an inferior good 
D) neither a normal good nor an inferior good

Question 18

Use the following figure to answer the question :  
Which statement is true?

Accepted Answer

A) D1 is more elastic than D2. 
B) D2 is more elastic than D1. 
C) D1 and D2 have the same elasticity. 
D) There is no way to determine the relative elasticities of D1 and D2. 
A) D1 is more elastic than D2. 
B) D2 is more elastic than D1. 
C) D1 and D2 have the same elasticity. 
D) There is no way to determine the relative elasticities of D1 and D2.

Question 19

Which of the following statements best represents the attitude of a consumer with a very inelastic demand toward various brands of coffee?

Accepted Answer

A) "All the brands are exactly the same.I always buy the cheapest." 
B) "Coffee is coffee; one brand is as good as the rest." 
C) "My brand is so superior to the rest of the brands that I'm willing to pay a bit more for it." 
D) "With my limited budget my favorite brand is usually the 'what's on sale' brand." 
A) "All the brands are exactly the same.I always buy the cheapest." 
B) "Coffee is coffee; one brand is as good as the rest." 
C) "My brand is so superior to the rest of the brands that I'm willing to pay a bit more for it." 
D) "With my limited budget my favorite brand is usually the 'what's on sale' brand."

Question 20

Use the following Figure to answer the question : 
 
-About how much of the tax is paid by consumers in the form of higher prices?

Accepted Answer

A) 20 cents 
B) 50 cents 
C) $1 
D) $4.85 
E) $5 
A) 20 cents 
B) 50 cents 
C) $1 
D) $4.85 
E) $5

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

If the elasticity of demand for a service is 0.4 and price is raised,

If the elasticity for yachts is three, a tax on yachts will ___________ total revenue.

Cross elasticity of demand measures the response in

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

When the price of CD players increases 5%, quantity demanded decreases 5%. The price elasticity for CD players is

Use the following Figure to answer the question : -How much is the tax?

A perfectly inelastic demand curve is

Use the following Figure to answer the question : -The consumer will pay for of the tax and the seller will pay for of the tax.

Advertisers go to great lengths to build brand loyalty because

An elasticity of 1.5 means that a 1% change in price will lead to a _____% change in quantity demanded.

Statement I: Over time the demand for most goods becomes more elastic. Statement II: The more uses a product has, the less elastic its demand.

A.How much is the tax in the above graph? B.How much of this tax is borne by the buyer and how much is borne by the seller? C.As a result of the tax, by about how much does consumption fall?

If the price of chocolate goes up 20% and quantity demanded falls by 5%, demand is ______.

Draw another supply curve S to indicate a $1 tax increase. (a) How much of this tax is borne by the buyer? (b) How much of this tax is borne by the seller?

Use the following figure to answer the question : -In general taxes on goods and services

If the income elasticity for Ramen Noodles is -3.0, we may conclude that Ramen Noodles are _________.

Use the following figure to answer the question : Which statement is true?

Which of the following statements best represents the attitude of a consumer with a very inelastic demand toward various brands of coffee?

Use the following Figure to answer the question : -About how much of the tax is paid by consumers in the form of higher prices?

A Brief Economic History of the United States

Resource Utilization

The Mixed Economy

Supply and Demand

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

Filters

Exam 6: The Price Elasticities of Demand and Supply

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

If the elasticity of demand for a service is 0.4 and price is raised,

If the elasticity for yachts is three, a tax on yachts will ___________ total revenue.

Cross elasticity of demand measures the response in

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

When the price of CD players increases 5%, quantity demanded decreases 5%. The price elasticity for CD players is

Use the following Figure to answer the question : -How much is the tax?

A perfectly inelastic demand curve is

Use the following Figure to answer the question : -The consumer will pay for ______ of the tax and the seller will pay for ______ of the tax.

Advertisers go to great lengths to build brand loyalty because

An elasticity of 1.5 means that a 1% change in price will lead to a _____% change in quantity demanded.

Statement I: Over time the demand for most goods becomes more elastic. Statement II: The more uses a product has, the less elastic its demand.

A.How much is the tax in the above graph? B.How much of this tax is borne by the buyer and how much is borne by the seller? C.As a result of the tax, by about how much does consumption fall?

If the price of chocolate goes up 20% and quantity demanded falls by 5%, demand is ______.

Draw another supply curve S to indicate a $1 tax increase. (a) How much of this tax is borne by the buyer? (b) How much of this tax is borne by the seller?

Use the following figure to answer the question : -In general taxes on goods and services

If the income elasticity for Ramen Noodles is -3.0, we may conclude that Ramen Noodles are _________.

Use the following figure to answer the question : Which statement is true?

Which of the following statements best represents the attitude of a consumer with a very inelastic demand toward various brands of coffee?

Use the following Figure to answer the question : -About how much of the tax is paid by consumers in the form of higher prices?

A Brief Economic History of the United States

Resource Utilization

The Mixed Economy

Supply and Demand

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

Filters

Use the following Figure to answer the question : -The consumer will pay for of the tax and the seller will pay for of the tax.