Question 1

When a one-percent change in price is accompanied by a larger percent change in quantity demanded,

Accepted Answer

A)  demand is inelastic 
B)  supply is elastic 
C)  the good is a normal good 
D)  the good is an inferior good 
E)  demand is elastic 
A)  demand is inelastic 
B)  supply is elastic 
C)  the good is a normal good 
D)  the good is an inferior good 
E)  demand is elastic

Question 2

The percent change in the quantity of one commodity demanded divided by the percent change in the price of another commodity is the

Accepted Answer

A)  price elasticity of demand 
B)  price elasticity of supply 
C)  income elasticity of demand 
D)  income elasticity of supply 
E)  cross-price elasticity of demand 
A)  price elasticity of demand 
B)  price elasticity of supply 
C)  income elasticity of demand 
D)  income elasticity of supply 
E)  cross-price elasticity of demand

Question 3

Suppose a local bookstore notices that a 2 percent increase in book prices leads to a 2 percent decrease in the number of books sold.Which of the following is true?

Accepted Answer

A)  Demand for books is price elastic. 
B)  The store's sales revenue did not change. 
C)  Demand for books is price inelastic. 
D)  Demand for books is perfectly inelastic. 
E)  The bookstore could increase revenue by further lowering prices. 
A)  Demand for books is price elastic. 
B)  The store's sales revenue did not change. 
C)  Demand for books is price inelastic. 
D)  Demand for books is perfectly inelastic. 
E)  The bookstore could increase revenue by further lowering prices.

Question 4

-Figure 5-4 shows the demand schedule for hockey pucks.What is the price elasticity of demand when the price changes from $4 per puck to $5 per puck?

Accepted Answer

A)  0.33 
B)  1.00 
C)  1.15 
D)  3.00 
E)  none of these 
A)  0.33 
B)  1.00 
C)  1.15 
D)  3.00 
E)  none of these

Question 5

If demand is price elastic,a decrease in price results in a(n)

Accepted Answer

A)  decrease in total expenditure on the good 
B)  unfavorable shift in tastes and preferences 
C)  decrease in total cost for the seller 
D)  increase in supply of the good 
E)  increase in total revenue to the seller 
A)  decrease in total expenditure on the good 
B)  unfavorable shift in tastes and preferences 
C)  decrease in total cost for the seller 
D)  increase in supply of the good 
E)  increase in total revenue to the seller

Question 6

For a normal good,quantity demanded

Accepted Answer

A)  increases as income rises,so the income elasticity of demand is positive 
B)  increases as income rises,so the income elasticity of demand is negative 
C)  falls as income rises,so the income elasticity of demand is positive 
D)  falls as income rises,so the income elasticity of demand is negative 
E)  remains unchanged as income rises,so the income elasticity of demand is zero 
A)  increases as income rises,so the income elasticity of demand is positive 
B)  increases as income rises,so the income elasticity of demand is negative 
C)  falls as income rises,so the income elasticity of demand is positive 
D)  falls as income rises,so the income elasticity of demand is negative 
E)  remains unchanged as income rises,so the income elasticity of demand is zero

Question 7

Another term that could be used for elasticity is

Accepted Answer

A)  sensitivity 
B)  utility 
C)  surplus 
D)  profit 
E)  slope 
A)  sensitivity 
B)  utility 
C)  surplus 
D)  profit 
E)  slope

Question 8

Daniel's consumption of pizzas drops from 6 per week to 4 per week when the price rises from $9 to $11.His price elasticity of demand for pizza equals

Accepted Answer

A)  0.5 
B)  1 
C)  2 
D)  0.08 
E)  1.7 
A)  0.5 
B)  1 
C)  2 
D)  0.08 
E)  1.7

Question 9

Suppose that when the price of aspirin rises from $2 to $3 per bottle,the quantity demanded falls from 800 bottles per day to 700 bottles per day.Over this range,the demand for aspirin is

Accepted Answer

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

Question 10

Butter and margarine are examples of

Accepted Answer

A)  substitutes 
B)  complements 
C)  externalities 
D)  inferior goods 
E)  goods that are independent of each other 
A)  substitutes 
B)  complements 
C)  externalities 
D)  inferior goods 
E)  goods that are independent of each other

Exam 5: Elasticity

When a one-percent change in price is accompanied by a larger percent change in quantity demanded,

The percent change in the quantity of one commodity demanded divided by the percent change in the price of another commodity is the

Suppose a local bookstore notices that a 2 percent increase in book prices leads to a 2 percent decrease in the number of books sold.Which of the following is true?

-Figure 5-4 shows the demand schedule for hockey pucks.What is the price elasticity of demand when the price changes from $4 per puck to $5 per puck?

If demand is price elastic,a decrease in price results in a(n)

For a normal good,quantity demanded

Another term that could be used for elasticity is

Daniel's consumption of pizzas drops from 6 per week to 4 per week when the price rises from $9 to $11.His price elasticity of demand for pizza equals

Suppose that when the price of aspirin rises from $2 to $3 per bottle,the quantity demanded falls from 800 bottles per day to 700 bottles per day.Over this range,the demand for aspirin is

Butter and margarine are examples of

What Is Economics

Scarcity,choice,and Economic Systems

Scarcity, choice, and Economic Systems: Part A

Working With Supply and Demand

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

Perfect Competition: Part A

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

labor Markets: Part A

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

What Macroeconomics Tries to Explain

Production, income, and Employment

The Price Level and Inflation

The Classical Long-Run Model

Part A: The Classical Model in an Open Economy

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-Run Macro Model

Fiscal Policy

Money,banks,and the Federal Reserve

The Money Market and Monetary Policy

Feedback Effects From GDP to the Money Market

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Appendix-finding Equilibrium GDP Algebraically

Appendix: Capital and Leverage

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