Question 1

Another word for elasticity is _____.​

Accepted Answer

A) responsiveness 
B) happiness 
C) bonus 
D) profit 
E) surplus 
A) responsiveness 
B) happiness 
C) bonus 
D) profit 
E) surplus

Question 2

If an increase in the price of a product from $100 to $200 per unit leads to a decrease in the quantity demanded from 10 to 8 units, then demand is:​

Accepted Answer

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

Question 3

Given the availability of California oranges, the demand for Florida oranges will:​

Accepted Answer

A) be less elastic than if there were no California oranges. 
B) be more elastic than if there were no California oranges. 
C) have the same elasticity as it would if there were no California oranges. 
D) be perfectly elastic. 
E) be perfectly inelastic. 
A) be less elastic than if there were no California oranges. 
B) be more elastic than if there were no California oranges. 
C) have the same elasticity as it would if there were no California oranges. 
D) be perfectly elastic. 
E) be perfectly inelastic.

Question 4

If the cross-price elasticity of demand between Good x and Good y is 0.4, then:​

Accepted Answer

A) the demand for good x is highly responsive to changes in the price of good y. 
B) a 10 percent increase in the price of good y leads to a 0.4 percent increase in the quantity demanded of good x. 
C) a 10 percent decrease in the price of good y leads to a 4 percent decrease in the demand for good y. 
D) good x and good y are complements. 
E) good x is a normal good and good y is an inferior good. 
A) the demand for good x is highly responsive to changes in the price of good y. 
B) a 10 percent increase in the price of good y leads to a 0.4 percent increase in the quantity demanded of good x. 
C) a 10 percent decrease in the price of good y leads to a 4 percent decrease in the demand for good y. 
D) good x and good y are complements. 
E) good x is a normal good and good y is an inferior good.

Question 5

As price decreases along a linear demand curve, the price elasticity of demand decreases.​

Accepted Answer

A) True 
 B)False

Question 6

A government-imposed price floor above the market price of milk would increase consumers' expenditures on milk only if _____.​

Accepted Answer

A) demand is elastic 
B) supply is inelastic 
C) demand falls 
D) demand is inelastic 
E) supply is unit elastic 
A) demand is elastic 
B) supply is inelastic 
C) demand falls 
D) demand is inelastic 
E) supply is unit elastic

Question 7

Figure 5.5 shows the total revenue curve for a firm. Which of the following statements is true in the range of the total revenue curve labeled A?​ ​
Figure 5.5

Accepted Answer

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

Question 8

Income elasticity of demand is greater than zero for all of the following except:​

Accepted Answer

A) restaurant meals. 
B) beer. 
C) owner-occupied housing. 
D) food items. 
E) rental housing. 
A) restaurant meals. 
B) beer. 
C) owner-occupied housing. 
D) food items. 
E) rental housing.

Question 9

Figure 5.2 shows a demand curve. D, the demand curve in the figure below is an example of a(n):​ ​
Figure 5.2.

Accepted Answer

A) upward-sloping demand curve. 
B) linear demand curve. 
C) perfectly elastic demand curve. 
D) unit-elastic demand curve. 
E) perfectly inelastic demand curve. 
A) upward-sloping demand curve. 
B) linear demand curve. 
C) perfectly elastic demand curve. 
D) unit-elastic demand curve. 
E) perfectly inelastic demand curve.

Another word for elasticity is _____.

If an increase in the price of a product from $100 to $200 per unit leads to a decrease in the quantity demanded from 10 to 8 units, then demand is:

Given the availability of California oranges, the demand for Florida oranges will:

If the cross-price elasticity of demand between Good x and Good y is 0.4, then:

As price decreases along a linear demand curve, the price elasticity of demand decreases.

A government-imposed price floor above the market price of milk would increase consumers' expenditures on milk only if _____.

Figure 5.5 shows the total revenue curve for a firm. Which of the following statements is true in the range of the total revenue curve labeled A? Figure 5.5

Income elasticity of demand is greater than zero for all of the following except:

Figure 5.2 shows a demand curve. D, the demand curve in the figure below is an example of a(n): Figure 5.2.

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Exam 5: Elasticity of Demand and Supply