Question 1

Which of the following characteristics would describe a product with an elastic demand?

Accepted Answer

A) The good has many different uses and many substitutes for the product exist. 
B) The good has relatively few uses and few substitutes for the product exist. 
C) The good is considered a luxury and few substitutes for the product exist. 
D) The good has many different uses and the price of the product is low relative to the buyer's income. 
A) The good has many different uses and many substitutes for the product exist. 
B) The good has relatively few uses and few substitutes for the product exist. 
C) The good is considered a luxury and few substitutes for the product exist. 
D) The good has many different uses and the price of the product is low relative to the buyer's income.

Question 2

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?   (a) $6
(b) Buyer pays $1 and seller pays $5
(c) about 16

Accepted Answer

(a) $6
(b) Buyer pay

Question 3

If price were increased from $25 to $26 and quantity demanded fell from 10 to 9, calculate elasticity; state whether demand is elastic, unit elastic, or inelastic; and find out how much total revenue was when price was $25 and $26.

Accepted Answer

P1 = $25;

Question 4

If demand is unit elastic and price is _________, total revenue will ________.

Accepted Answer

A) raised; increase 
B) raised; decrease 
C) lowered; increase 
D) lowered; remain unchanged 
A) raised; increase 
B) raised; decrease 
C) lowered; increase 
D) lowered; remain unchanged

Question 5

Which statement is true?

Accepted Answer

A) A perfectly elastic demand curve has an elasticity of zero. 
B) Elasticity measures the change in quantity demanded in response to a change in price. 
C) Elasticity of demand is found by dividing the percentage change in price by the percentage change in quantity. 
D) None of these statements are true. 
A) A perfectly elastic demand curve has an elasticity of zero. 
B) Elasticity measures the change in quantity demanded in response to a change in price. 
C) Elasticity of demand is found by dividing the percentage change in price by the percentage change in quantity. 
D) None of these statements are true.

Question 6

Along a downward-sloping straight-line demand curve,

Accepted Answer

A) demand is perfectly elastic when price is zero. 
B) demand is unit elastic at all prices. 
C) demand is very inelastic at high prices but becomes more elastic as price decreases. 
D) demand is very elastic at high prices but becomes less elastic as price decreases. 
A) demand is perfectly elastic when price is zero. 
B) demand is unit elastic at all prices. 
C) demand is very inelastic at high prices but becomes more elastic as price decreases. 
D) demand is very elastic at high prices but becomes less elastic as price decreases.

Question 7

If demand is unit elastic a small increase in price will

Accepted Answer

A) raise total revenue. 
B) lower total revenue. 
C) not change total revenue. 
A) raise total revenue. 
B) lower total revenue. 
C) not change total revenue.

Question 8

Which product will have the most elastic demand curve?

Accepted Answer

A) Gasoline 
B) Heating oil 
C) Shell-brand gasoline 
D) Cigarettes 
A) Gasoline 
B) Heating oil 
C) Shell-brand gasoline 
D) Cigarettes

Question 9

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

Accepted Answer

002 (or an

Question 10

In the graph above, draw a supply curve, S1, and then draw a less elastic supply curve, S2.

Accepted Answer

The answer of In the graph above, draw a supply...

Question 11

When the cross elasticity of demand is ________, the goods or services are ________.

Accepted Answer

A) zero; substitutes 
B) negative; substitutes 
C) positive; complements 
D) positive; substitutes 
A) zero; substitutes 
B) negative; substitutes 
C) positive; complements 
D) positive; substitutes

Question 12

Demand is inelastic if

Accepted Answer

A) the percentage change in quantity is greater than the percentage change in price. 
B) the elasticity of demand is less than 1. 
C) the demand for the good is sensitive to changes in price. 
D) more units will be purchased if the price increases. 
A) the percentage change in quantity is greater than the percentage change in price. 
B) the elasticity of demand is less than 1. 
C) the demand for the good is sensitive to changes in price. 
D) more units will be purchased if the price increases.

Question 13

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

Accepted Answer

A) $1.00 
B) $1.50 
C) $2.00 
D) $2.50 
A) $1.00 
B) $1.50 
C) $2.00 
D) $2.50

Question 14

When demand is elastic,

Accepted Answer

A) the percentage change in price is greater than the percentage change in quantity demanded. 
B) price increases raise total revenue. 
C) the buyer is sensitive to changes in price. 
D) the elasticity coefficient is greater than zero, but less than one. 
A) the percentage change in price is greater than the percentage change in quantity demanded. 
B) price increases raise total revenue. 
C) the buyer is sensitive to changes in price. 
D) the elasticity coefficient is greater than zero, but less than one.

Question 15

In graph: (a) How much is the tax? (b) How much of this tax is borne by the buyer? (c) How much of this tax is borne by the seller?

Accepted Answer

(a) $4.00

Question 16

If the elasticity coefficient is greater than zero but less one, the good is ____________.

Accepted Answer

The answer of If the elasticity coefficient is greater than...

Question 17

When elasticity is 0.1, demand is

Accepted Answer

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

Question 18

In the space provided in the graph above, draw a demand curve D1, and then draw a second demand curve, D2, that is less elastic.

Accepted Answer

The answer of In the space provided in the graph...

Question 19

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 20

Use the following figure to answer the question :  
-A 4% decline in the price of laser printers causes the quantity demanded to rise by 8%. The demand for laser printers is

Accepted Answer

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

Which of the following characteristics would describe a product with an elastic 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? (a) $6 (b) Buyer pays $1 and seller pays $5 (c) about 16

If price were increased from $25 to $26 and quantity demanded fell from 10 to 9, calculate elasticity; state whether demand is elastic, unit elastic, or inelastic; and find out how much total revenue was when price was $25 and $26.

If demand is unit elastic and price is _, total revenue will .

Which statement is true?

Along a downward-sloping straight-line demand curve,

If demand is unit elastic a small increase in price will

Which product will have the most elastic demand curve?

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

In the graph above, draw a supply curve, S1, and then draw a less elastic supply curve, S2.

When the cross elasticity of demand is , the goods or services are .

Demand is inelastic if

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

When demand is elastic,

In graph: (a) How much is the tax? (b) How much of this tax is borne by the buyer? (c) How much of this tax is borne by the seller?

If the elasticity coefficient is greater than zero but less one, the good is ____________.

When elasticity is 0.1, demand is

In the space provided in the graph above, draw a demand curve D1, and then draw a second demand curve, D2, that is less elastic.

Which statement is true?

Use the following figure to answer the question : -A 4% decline in the price of laser printers causes the quantity demanded to rise by 8%. The demand for laser printers is

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

Which of the following characteristics would describe a product with an elastic 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? (a) $6 (b) Buyer pays $1 and seller pays $5 (c) about 16

If price were increased from $25 to $26 and quantity demanded fell from 10 to 9, calculate elasticity; state whether demand is elastic, unit elastic, or inelastic; and find out how much total revenue was when price was $25 and $26.

If demand is unit elastic and price is _________, total revenue will ________.

Which statement is true?

Along a downward-sloping straight-line demand curve,

If demand is unit elastic a small increase in price will

Which product will have the most elastic demand curve?

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

In the graph above, draw a supply curve, S1, and then draw a less elastic supply curve, S2.

When the cross elasticity of demand is ________, the goods or services are ________.

Demand is inelastic if

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

When demand is elastic,

In graph: (a) How much is the tax? (b) How much of this tax is borne by the buyer? (c) How much of this tax is borne by the seller?

If the elasticity coefficient is greater than zero but less one, the good is ____________.

When elasticity is 0.1, demand is

In the space provided in the graph above, draw a demand curve D1, and then draw a second demand curve, D2, that is less elastic.

Which statement is true?

Use the following figure to answer the question : -A 4% decline in the price of laser printers causes the quantity demanded to rise by 8%. The demand for laser printers is

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

If demand is unit elastic and price is _, total revenue will .

When the cross elasticity of demand is , the goods or services are .