Question 1

The price elasticity of demand is useful because it measures the responsiveness of _____ to changes in _____.​

Accepted Answer

A) taxpayers; demand 
B) producers; supply 
C) consumers; price 
D) consumers; demand 
E) producers; income 
A) taxpayers; demand 
B) producers; supply 
C) consumers; price 
D) consumers; demand 
E) producers; income

Question 2

The demand for Olin skis is likely to be:​

Accepted Answer

A) less elastic than the demand for skis in general. See 5-2: Determinants of the Price Elasticity of Demand 
B) more elastic than the demand for skis in general. See 5-2: Determinants of the Price Elasticity of Demand 
C) unit elastic relative to the demand for skis in general. See 5-2: Determinants of the Price Elasticity of Demand 
D) as elastic as the demand for skis in general. See 5-2: Determinants of the Price Elasticity of Demand 
E) greater than the demand for skis in general. See 5-2: Determinants of the Price Elasticity of Demand 
A) less elastic than the demand for skis in general. See 5-2: Determinants of the Price Elasticity of Demand 
B) more elastic than the demand for skis in general. See 5-2: Determinants of the Price Elasticity of Demand 
C) unit elastic relative to the demand for skis in general. See 5-2: Determinants of the Price Elasticity of Demand 
D) as elastic as the demand for skis in general. See 5-2: Determinants of the Price Elasticity of Demand 
E) greater than the demand for skis in general. See 5-2: Determinants of the Price Elasticity of Demand

Question 3

The cross-price elasticity of demand between pancakes and waffles is positive. This indicates all of the following except one. Which is the exception?​

Accepted Answer

A) Pancakes and waffles are substitutes. 
B) An increase in the price of pancakes will shift the demand curve for waffles to the right. 
C) An increase in the price of waffles will shift the demand curve for pancakes to the right. 
D) A decrease in the supply of waffles will shift the demand curve for pancakes to the right. 
E) The demand for pancakes and the demand for waffles are price elastic. 
A) Pancakes and waffles are substitutes. 
B) An increase in the price of pancakes will shift the demand curve for waffles to the right. 
C) An increase in the price of waffles will shift the demand curve for pancakes to the right. 
D) A decrease in the supply of waffles will shift the demand curve for pancakes to the right. 
E) The demand for pancakes and the demand for waffles are price elastic.

Question 4

Figure 5.6 shows a vertical demand curve. The demand in the figure below is:​ ​
Figure 5.6

Accepted Answer

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

Question 5

Economists distinguish between normal and inferior goods using:​

Accepted Answer

A) the price elasticity of demand. 
B) the price elasticity of supply. 
C) the income elasticity of demand. 
D) the cross-price elasticity of demand. 
E) tax incidence. 
A) the price elasticity of demand. 
B) the price elasticity of supply. 
C) the income elasticity of demand. 
D) the cross-price elasticity of demand. 
E) tax incidence.

Question 6

One determinant of the price elasticity of supply is:​

Accepted Answer

A) the price elasticity of demand. 
B) how rapidly costs increase when a firm increases its output. 
C) whether the production process relies heavily on capital or on labor. 
D) the number and closeness of available substitutes. 
E) whether the product is a normal good or an inferior good. 
A) the price elasticity of demand. 
B) how rapidly costs increase when a firm increases its output. 
C) whether the production process relies heavily on capital or on labor. 
D) the number and closeness of available substitutes. 
E) whether the product is a normal good or an inferior good.

Question 7

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

Question 8

Table 5.4 shows the price and quantity combinations for a product. The demand for the good is _____, and an increase in the price of the product from $40 to $60 per unit will _____ total revenue.​ Table 5.4
​

Accepted Answer

A) unit elastic; increase​ 
B) elastic; decrease 
C) unit elastic; not change 
D) inelastic; increase 
E) elastic; decrease. 
A) unit elastic; increase​ 
B) elastic; decrease 
C) unit elastic; not change 
D) inelastic; increase 
E) elastic; decrease.

Question 9

For which of the following products is the consumer's demand curve most likely to be vertical?​

Accepted Answer

A) Lobster, for a seafood lover. 
B) Cars, for high school students. 
C) Insulin, for a diabetic. 
D) Compact disks, for a music lover. 
E) Beef, for a food lover. 
A) Lobster, for a seafood lover. 
B) Cars, for high school students. 
C) Insulin, for a diabetic. 
D) Compact disks, for a music lover. 
E) Beef, for a food lover.

Question 10

Table 5.6 shows the change in the quantity demanded for Good A and Good B as a result of a change in income. Use the information in the table below to calculate the value of the income elasticity of demand for Good A.​ ​
Table 5.6
​
​
Quantity
Income
Good A
​
100
$1,000
120
​
$2,000
Good B
200
$20
140
$35

Accepted Answer

A) 1 
B) 2/9 
C) 3/11 
D) 11/3 
E) 9/2 
A) 1 
B) 2/9 
C) 3/11 
D) 11/3 
E) 9/2

Question 11

As the economy recovers from a recession, we should expect that the:​

Accepted Answer

A) demand for inferior goods will fall and the demand for normal goods will rise. 
B) demand for both inferior and normal goods will rise. 
C) demand for inferior goods will rise and the demand for normal goods will fall. 
D) demand for both inferior and normal goods will fall. 
E) demand for inferior goods and normal goods will remain the same. 
A) demand for inferior goods will fall and the demand for normal goods will rise. 
B) demand for both inferior and normal goods will rise. 
C) demand for inferior goods will rise and the demand for normal goods will fall. 
D) demand for both inferior and normal goods will fall. 
E) demand for inferior goods and normal goods will remain the same.

Question 12

If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then the demand is:​

Accepted Answer

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

Question 13

The price elasticity of demand is defined as:​

Accepted Answer

A) the percentage change in price divided by the percentage change in quantity demanded. 
B) the percentage change in quantity demanded divided by the percentage change in price. 
C) the change in quantity demanded divided by the change in price. 
D) the change in price divided by the change in quantity demanded. 
E) the quantity demanded divided by the price. 
A) the percentage change in price divided by the percentage change in quantity demanded. 
B) the percentage change in quantity demanded divided by the percentage change in price. 
C) the change in quantity demanded divided by the change in price. 
D) the change in price divided by the change in quantity demanded. 
E) the quantity demanded divided by the price.

Question 14

Which of the following is assumed to be constant while calculating the price elasticity of demand?​

Accepted Answer

A) The price of the product itself 
B) The quantity demanded of the product 
C) Total revenue received from the sale of the product 
D) The price of all other products 
E) The cost of production 
A) The price of the product itself 
B) The quantity demanded of the product 
C) Total revenue received from the sale of the product 
D) The price of all other products 
E) The cost of production

Question 15

Figure 5.10 shows two upward-sloping linear supply curves that pass through the origin. The price elasticity of supply between $20 and $40 on the supply curve S' is _____.​ Figure 5.10
​

Accepted Answer

A) 0 
B) infinity 
C) 1 
D) 2 
E) 10 
A) 0 
B) infinity 
C) 1 
D) 2 
E) 10

Question 16

Table 5.1 shows the change in the quantity demanded for a product as a result of a change in the price of the product. Use the information in the table below to calculate the value of the price elasticity of demand.​ Table 5.1
​
​
Quantity
Price
Old
20
$40
New
10
$60
​

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 17

Demand for a necessity, such as food, is:​

Accepted Answer

A) both income and price inelastic. 
B) income inelastic and price elastic. 
C) income elastic and price inelastic. 
D) both income and price elastic. 
E) income elastic and perfectly price inelastic. 
A) both income and price inelastic. 
B) income inelastic and price elastic. 
C) income elastic and price inelastic. 
D) both income and price elastic. 
E) income elastic and perfectly price inelastic.

Question 18

If the price elasticity of supply in the kiwi fruit industry equals 1, supply is:​

Accepted Answer

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

Question 19

The price elasticity of demand helps determine the effect of price changes on a firm's:​

Accepted Answer

A) property tax. 
B) profit. 
C) total output. 
D) revenue. 
E) total cost. 
A) property tax. 
B) profit. 
C) total output. 
D) revenue. 
E) total cost.

Question 20

When the cross-price elasticity of demand between two products is positive, the two goods are said to be substitutes.​

Accepted Answer

A) True 
 B)False

Exam 5: Elasticity of Demand and Supply

The price elasticity of demand is useful because it measures the responsiveness of _____ to changes in _____.​

The demand for Olin skis is likely to be:​

The cross-price elasticity of demand between pancakes and waffles is positive. This indicates all of the following except one. Which is the exception?​

Figure 5.6 shows a vertical demand curve. The demand in the figure below is:​ ​ Figure 5.6

Economists distinguish between normal and inferior goods using:​

One determinant of the price elasticity of supply is:​

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

Table 5.4 shows the price and quantity combinations for a product. The demand for the good is _____, and an increase in the price of the product from $40 to $60 per unit will _____ total revenue.​ Table 5.4 ​

For which of the following products is the consumer's demand curve most likely to be vertical?​

As the economy recovers from a recession, we should expect that the:​

If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then the demand is:​

The price elasticity of demand is defined as:​

Which of the following is assumed to be constant while calculating the price elasticity of demand?​

Figure 5.10 shows two upward-sloping linear supply curves that pass through the origin. The price elasticity of supply between $20 and $40 on the supply curve S' is _____.​ Figure 5.10 ​

Table 5.1 shows the change in the quantity demanded for a product as a result of a change in the price of the product. Use the information in the table below to calculate the value of the price elasticity of demand.​ Table 5.1 ​ ​ Quantity Price Old 20 $40 New 10 $60 ​

Demand for a necessity, such as food, is:​

If the price elasticity of supply in the kiwi fruit industry equals 1, supply is:​

The price elasticity of demand helps determine the effect of price changes on a firm's:​

When the cross-price elasticity of demand between two products is positive, the two goods are said to be substitutes.​

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Filters

The price elasticity of demand is useful because it measures the responsiveness of _ to changes in _.

The demand for Olin skis is likely to be:

The cross-price elasticity of demand between pancakes and waffles is positive. This indicates all of the following except one. Which is the exception?

Figure 5.6 shows a vertical demand curve. The demand in the figure below is: Figure 5.6

Economists distinguish between normal and inferior goods using:

One determinant of the price elasticity of supply is:

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

Table 5.4 shows the price and quantity combinations for a product. The demand for the good is _, and an increase in the price of the product from $40 to $60 per unit will _ total revenue. Table 5.4

For which of the following products is the consumer's demand curve most likely to be vertical?

As the economy recovers from a recession, we should expect that the:

If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then the demand is:

The price elasticity of demand is defined as:

Which of the following is assumed to be constant while calculating the price elasticity of demand?

Figure 5.10 shows two upward-sloping linear supply curves that pass through the origin. The price elasticity of supply between $20 and $40 on the supply curve S' is _____. Figure 5.10

Table 5.1 shows the change in the quantity demanded for a product as a result of a change in the price of the product. Use the information in the table below to calculate the value of the price elasticity of demand. Table 5.1 Quantity Price Old 20 $40 New 10 $60

Demand for a necessity, such as food, is:

If the price elasticity of supply in the kiwi fruit industry equals 1, supply is:

The price elasticity of demand helps determine the effect of price changes on a firm's:

When the cross-price elasticity of demand between two products is positive, the two goods are said to be substitutes.