Question 1

The percentage change in the demand for film divided by the percentage change in the price of cameras indicates

Accepted Answer

A)  the cross-price elasticity of demand between film and cameras 
B)  the cross-price elasticity of demand for photographs 
C)  the price elasticity of demand for film 
D)  the price elasticity of demand for cameras 
E)  nothing because the two goods fall into the broadly defined category of photographic equipment 
A)  the cross-price elasticity of demand between film and cameras 
B)  the cross-price elasticity of demand for photographs 
C)  the price elasticity of demand for film 
D)  the price elasticity of demand for cameras 
E)  nothing because the two goods fall into the broadly defined category of photographic equipment

Question 2

If the supply curve is unit elastic,then all of the following are correct,except:

Accepted Answer

A)  A 10% increase in price causes a 10% increase in quantity supplied 
B)  A 20% decrease in price causes a 20% decrease in price 
C)  The supply curve goes through the origin 
D)  A 10% decrease in price causes a 10% increase in quantity supplied 
E)  A 20% increase in price causes a 20% increase in quantity supplied 
A)  A 10% increase in price causes a 10% increase in quantity supplied 
B)  A 20% decrease in price causes a 20% decrease in price 
C)  The supply curve goes through the origin 
D)  A 10% decrease in price causes a 10% increase in quantity supplied 
E)  A 20% increase in price causes a 20% increase in quantity supplied

Question 3

For a perfectly elastic supply curve,a 20% increase in price leads to

Accepted Answer

A)  A 20% increase in quantity supplied 
B)  A 20% decrease in quantity supplied 
C)  An increase in quantity supplied to infinity 
D)  A decrease of quantity supplied to zero 
E)  No change in quantity supplied 
A)  A 20% increase in quantity supplied 
B)  A 20% decrease in quantity supplied 
C)  An increase in quantity supplied to infinity 
D)  A decrease of quantity supplied to zero 
E)  No change in quantity supplied

Question 4

If output in the calculator market increases by 5 percent when the price increases by more than 5 percent,then

Accepted Answer

A)  supply is inelastic 
B)  supply is elastic 
C)  a small increase in price will cause a leftward shift of the supply curve 
D)  a small increase in price will cause a rightward shift of the supply curve 
E)  a large increase in price will cause a large shift of the supply curve 
A)  supply is inelastic 
B)  supply is elastic 
C)  a small increase in price will cause a leftward shift of the supply curve 
D)  a small increase in price will cause a rightward shift of the supply curve 
E)  a large increase in price will cause a large shift of the supply curve

Question 5

As producers have more time to adjust to a price change,price elasticity of supply

Accepted Answer

A)  increases 
B)  decreases 
C)  remains the same 
D)  rises and then falls 
E)  falls and then rises 
A)  increases 
B)  decreases 
C)  remains the same 
D)  rises and then falls 
E)  falls and then rises

Question 6

Exhibit 5-2
  
-Use the information in Exhibit 5-2 to calculate the value of price elasticity of demand.

Accepted Answer

A)  -2/3 
B)  -1/3 
C)  -3/5 
D)  -5/3 
E)  0 
A)  -2/3 
B)  -1/3 
C)  -3/5 
D)  -5/3 
E)  0

Question 7

An increase in the price of T-shirts from $20 to $25 causes an increase in the quantity supplied of T-shirts from 12,000 to 14,000.The price elasticity of supply is:

Accepted Answer

A)  5/2 
B)  2/5 
C)  -2/5 
D)  9/13 
E)  13/9 
A)  5/2 
B)  2/5 
C)  -2/5 
D)  9/13 
E)  13/9

Question 8

All of the following are examples of a constant-elasticity demand curve except a(n)

Accepted Answer

A)  perfectly elastic demand curve 
B)  linear demand curve with a slope of -4 
C)  perfectly inelastic demand curve 
D)  unit-elastic demand curve 
E)  vertical demand curve 
A)  perfectly elastic demand curve 
B)  linear demand curve with a slope of -4 
C)  perfectly inelastic demand curve 
D)  unit-elastic demand curve 
E)  vertical demand curve

Question 9

Price elasticity of demand is typically negative because

Accepted Answer

A)  as price decreases,quantity demanded decreases 
B)  as price decreases,quantity demanded increases 
C)  as price decreases,demand decreases 
D)  as price decreases,demand increases 
E)  consumers rarely respond to a change in price 
A)  as price decreases,quantity demanded decreases 
B)  as price decreases,quantity demanded increases 
C)  as price decreases,demand decreases 
D)  as price decreases,demand increases 
E)  consumers rarely respond to a change in price

Question 10

Exhibit 5-21
  
-Use the information in Exhibit 5-21 to calculate the value of income elasticity of demand for Good B.

Accepted Answer

A)  -11/17 
B)  17/9 
C)  10/3 
D)  -3/10 
E)  1 
A)  -11/17 
B)  17/9 
C)  10/3 
D)  -3/10 
E)  1

Question 11

Wheat farmers in Kansas would benefit from a devastating crop failure in North Dakota (another major wheat-producing state) if the U.S.demand for wheat is

Accepted Answer

A)  inelastic 
B)  elastic 
C)  unit elastic 
D)  downward sloping 
E)  perfectly elastic 
A)  inelastic 
B)  elastic 
C)  unit elastic 
D)  downward sloping 
E)  perfectly elastic

Question 12

An inferior good is

Accepted Answer

A)  any good of low quality 
B)  one that consumers buy less of as the price rises 
C)  one that consumers buy less of as their income rises 
D)  one that has few substitutes 
E)  any good made with inexpensive labor 
A)  any good of low quality 
B)  one that consumers buy less of as the price rises 
C)  one that consumers buy less of as their income rises 
D)  one that has few substitutes 
E)  any good made with inexpensive labor

Question 13

If its value of cross-price elasticity is negative,a good must be a necessity.

Accepted Answer

A) True 
 B)False

Question 14

The greater the availability of close substitutes for a product,the greater the price elasticity of demand for that product.

Accepted Answer

A) True 
 B)False

Question 15

If the administration raises tuition on our campus in order to increase revenue,it will

Accepted Answer

A)  not be successful if the demand curve slopes downward 
B)  be successful if demand is elastic 
C)  be successful if demand is inelastic 
D)  be successful if supply is elastic 
E)  be successful if supply is inelastic 
A)  not be successful if the demand curve slopes downward 
B)  be successful if demand is elastic 
C)  be successful if demand is inelastic 
D)  be successful if supply is elastic 
E)  be successful if supply is inelastic

Question 16

In order to prove that Coca Cola and 7-Up are substitutes,one should test the _____ and get a _____.

Accepted Answer

A)  price elasticity of demand;number less than negative 1 
B)  income elasticity;positive number 
C)  cross-price elasticity;negative number 
D)  price elasticity of demand;number greater than negative 1 
E)  cross-price elasticity;positive number 
A)  price elasticity of demand;number less than negative 1 
B)  income elasticity;positive number 
C)  cross-price elasticity;negative number 
D)  price elasticity of demand;number greater than negative 1 
E)  cross-price elasticity;positive number

Question 17

Any supply curve that is a straight line passing through the graph's origin is unit elastic.

Accepted Answer

A) True 
 B)False

Question 18

An increase in income from $30,000 to $40,000 leads to a decrease in the quantity demanded from 50 to 40.The income elasticity of demand is:

Accepted Answer

A)  7/9 
B)  -7/9 
C)  1 
D)  9/7 
E)  -9/7 
A)  7/9 
B)  -7/9 
C)  1 
D)  9/7 
E)  -9/7

The percentage change in the demand for film divided by the percentage change in the price of cameras indicates

If the supply curve is unit elastic,then all of the following are correct,except:

For a perfectly elastic supply curve,a 20% increase in price leads to

If output in the calculator market increases by 5 percent when the price increases by more than 5 percent,then

As producers have more time to adjust to a price change,price elasticity of supply

Exhibit 5-2 -Use the information in Exhibit 5-2 to calculate the value of price elasticity of demand.

An increase in the price of T-shirts from $20 to $25 causes an increase in the quantity supplied of T-shirts from 12,000 to 14,000.The price elasticity of supply is:

All of the following are examples of a constant-elasticity demand curve except a(n)

Price elasticity of demand is typically negative because

Exhibit 5-21 -Use the information in Exhibit 5-21 to calculate the value of income elasticity of demand for Good B.

Wheat farmers in Kansas would benefit from a devastating crop failure in North Dakota (another major wheat-producing state) if the U.S.demand for wheat is

An inferior good is

If its value of cross-price elasticity is negative,a good must be a necessity.

The greater the availability of close substitutes for a product,the greater the price elasticity of demand for that product.

If the administration raises tuition on our campus in order to increase revenue,it will

In order to prove that Coca Cola and 7-Up are substitutes,one should test the _ and get a _.

Any supply curve that is a straight line passing through the graph's origin is unit elastic.

An increase in income from $30,000 to $40,000 leads to a decrease in the quantity demanded from 50 to 40.The income elasticity of demand is:

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Consumer Choice and Demand

Production and Cost in the Firm

Perfect Competition

Amonopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, interest, and Corporate Finance

Transaction Costs, imperfect Information, and Market Behavior

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Developing and Transitional Economies

Filters

Exam 5: Elasticity of Demand and Supply

The percentage change in the demand for film divided by the percentage change in the price of cameras indicates

If the supply curve is unit elastic,then all of the following are correct,except:

For a perfectly elastic supply curve,a 20% increase in price leads to

If output in the calculator market increases by 5 percent when the price increases by more than 5 percent,then

As producers have more time to adjust to a price change,price elasticity of supply

Exhibit 5-2 -Use the information in Exhibit 5-2 to calculate the value of price elasticity of demand.

An increase in the price of T-shirts from $20 to $25 causes an increase in the quantity supplied of T-shirts from 12,000 to 14,000.The price elasticity of supply is:

All of the following are examples of a constant-elasticity demand curve except a(n)

Price elasticity of demand is typically negative because

Exhibit 5-21 -Use the information in Exhibit 5-21 to calculate the value of income elasticity of demand for Good B.

Wheat farmers in Kansas would benefit from a devastating crop failure in North Dakota (another major wheat-producing state) if the U.S.demand for wheat is

An inferior good is

If its value of cross-price elasticity is negative,a good must be a necessity.

The greater the availability of close substitutes for a product,the greater the price elasticity of demand for that product.

If the administration raises tuition on our campus in order to increase revenue,it will

In order to prove that Coca Cola and 7-Up are substitutes,one should test the _____ and get a _____.

Any supply curve that is a straight line passing through the graph's origin is unit elastic.

An increase in income from $30,000 to $40,000 leads to a decrease in the quantity demanded from 50 to 40.The income elasticity of demand is:

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Consumer Choice and Demand

Production and Cost in the Firm

Perfect Competition

Amonopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, interest, and Corporate Finance

Transaction Costs, imperfect Information, and Market Behavior

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Developing and Transitional Economies

Filters

In order to prove that Coca Cola and 7-Up are substitutes,one should test the _ and get a _.