Question 1

Figure 6-5  
-Refer to Figure 6-5.The section of the demand curve labeled "A" represents

Accepted Answer

A)  the inelastic section of the demand curve. 
B)  the unit-elastic section of the demand curve. 
C)  the elastic section of the demand curve. 
D)  the perfectly elastic section of the demand curve. 
A)  the inelastic section of the demand curve. 
B)  the unit-elastic section of the demand curve. 
C)  the elastic section of the demand curve. 
D)  the perfectly elastic section of the demand curve.

Question 2

In September 2012,the average price of gasoline in the United States was $3.91 per gallon,and consumers purchased nearly 5 percent less gasoline than they had during September 2011,when the average price of gasoline was $3.66 per gallon.Based on these figures,when the price of gasoline rose from $3.66 per gallon to $3.91 per gallon,total revenue

Accepted Answer

A)  increased. 
B)  decreased. 
C)  did not change. 
D)  There is not enough information to determine what happened to total revenue. 
A)  increased. 
B)  decreased. 
C)  did not change. 
D)  There is not enough information to determine what happened to total revenue.

Question 3

If the price elasticity of demand for insulin is equal to zero then the demand curve for insulin is

Accepted Answer

A)  horizontal. 
B)  downward sloping. 
C)  curvilinear. 
D)  vertical. 
A)  horizontal. 
B)  downward sloping. 
C)  curvilinear. 
D)  vertical.

Question 4

The slope of a demand curve is not used to measure the price elasticity of demand because

Accepted Answer

A)  the slope of a linear demand curve is not constant. 
B)  the slope of a line cannot have a negative value. 
C)  the measurement of slope is sensitive to the units chosen for price and quantity. 
D)  the slope of the demand curve does not tell us how much quantity changes as price changes. 
A)  the slope of a linear demand curve is not constant. 
B)  the slope of a line cannot have a negative value. 
C)  the measurement of slope is sensitive to the units chosen for price and quantity. 
D)  the slope of the demand curve does not tell us how much quantity changes as price changes.

Question 5

When demand is unit-elastic,a change in price causes total revenue to stay the same because

Accepted Answer

A)  the percentage change in quantity demanded exactly offsets the percentage change in price. 
B)  buyers are buying the same quantity. 
C)  total revenue never changes with price changes. 
D)  the change in profit is offset by the change in production cost. 
A)  the percentage change in quantity demanded exactly offsets the percentage change in price. 
B)  buyers are buying the same quantity. 
C)  total revenue never changes with price changes. 
D)  the change in profit is offset by the change in production cost.

Question 6

When the price of tortilla chips rose by 10 percent,the quantity of tortilla chips sold fell 4 percent.This indicates that the demand for tortilla chips is

Accepted Answer

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

Question 7

If,for a given percentage increase in price,quantity supplied increases by a proportionately larger percentage,then supply is

Accepted Answer

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

Question 8

The price elasticity of supply measures

Accepted Answer

A)  the responsiveness of quantity supplied to changes in input prices. 
B)  the responsiveness of quantity supplied to changes in technology. 
C)  the responsiveness of quantity supplied to changes in price. 
D)  a supplier's ability to produce a good in the face of scarcity. 
A)  the responsiveness of quantity supplied to changes in input prices. 
B)  the responsiveness of quantity supplied to changes in technology. 
C)  the responsiveness of quantity supplied to changes in price. 
D)  a supplier's ability to produce a good in the face of scarcity.

Question 9

If tolls on a toll road can be raised significantly before commuters will consider using a free alternative,demand for using the toll road must be

Accepted Answer

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

Question 10

The price of wheat has fallen since 1950.Which of the following explains this price decline?

Accepted Answer

A)  The price elasticity of demand is less than 1 (in absolute value) and the income elasticity of demand for wheat is low. 
B)  The price elasticity of demand is greater than 1 (in absolute value) and the income elasticity of demand for wheat is low. 
C)  The price elasticity of demand is less than 1 (in absolute value) and wheat is an inferior good. 
D)  The price elasticity of demand is greater than 1 (in absolute value) and the income elasticity of demand for wheat is greater than 1. 
A)  The price elasticity of demand is less than 1 (in absolute value) and the income elasticity of demand for wheat is low. 
B)  The price elasticity of demand is greater than 1 (in absolute value) and the income elasticity of demand for wheat is low. 
C)  The price elasticity of demand is less than 1 (in absolute value) and wheat is an inferior good. 
D)  The price elasticity of demand is greater than 1 (in absolute value) and the income elasticity of demand for wheat is greater than 1.

Question 11

Suppose the California Nurses Union successfully secured a 12 percent increase in the wages of registered nurses.If a hospital responds by reducing the quantity of registered nurses hired and increasing the quantity of physician's assistants hired,what conclusion can you draw?

Accepted Answer

A)  Physician's assistants are more valuable in terms of their productivity. 
B)  The price elasticity of demand for registered nurses is negative while the price elasticity of demand for physician's assistants is positive. 
C)  The cross-price elasticity of demand between registered nurses and physician's assistants is positive. 
D)  The cross-price elasticity of demand between registered nurses and physician's assistants is negative. 
A)  Physician's assistants are more valuable in terms of their productivity. 
B)  The price elasticity of demand for registered nurses is negative while the price elasticity of demand for physician's assistants is positive. 
C)  The cross-price elasticity of demand between registered nurses and physician's assistants is positive. 
D)  The cross-price elasticity of demand between registered nurses and physician's assistants is negative.

Question 12

The midpoint formula is used to measure the elasticity of demand between two points on a demand curve

Accepted Answer

A)  when demand is elastic. 
B)  in special cases when the percentage change in the quantity demanded is equal to the percentage change in price. 
C)  to ensure that the elasticity has a negative value. 
D)  to ensure that we have only one value of the price elasticity of demand between two points on a demand curve. 
A)  when demand is elastic. 
B)  in special cases when the percentage change in the quantity demanded is equal to the percentage change in price. 
C)  to ensure that the elasticity has a negative value. 
D)  to ensure that we have only one value of the price elasticity of demand between two points on a demand curve.

Question 13

Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09.This means that

Accepted Answer

A)  an increase in the price of beer will increase the quantity demanded of beer and beer is a normal good. 
B)  an increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good. 
C)  a decrease in the price of beer will lead to an increase in revenue for beer sellers and beer is an inferior good. 
D)  an increase in the price of beer will lead to a decrease in the quantity demanded of beer and beer is a necessity. 
A)  an increase in the price of beer will increase the quantity demanded of beer and beer is a normal good. 
B)  an increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good. 
C)  a decrease in the price of beer will lead to an increase in revenue for beer sellers and beer is an inferior good. 
D)  an increase in the price of beer will lead to a decrease in the quantity demanded of beer and beer is a necessity.

Question 14

Shifts in the supply of oil have caused large changes in price since the 1970s because

Accepted Answer

A)  the supply of oil is very inelastic while the demand for oil is very elastic over short periods of time. 
B)  the supply of oil is very elastic while the demand for oil is inelastic over short periods of time. 
C)  both the supply of oil and the demand for oil are inelastic over short periods of time. 
D)  the supply of oil and the demand for oil are perfectly elastic over short periods of time. 
A)  the supply of oil is very inelastic while the demand for oil is very elastic over short periods of time. 
B)  the supply of oil is very elastic while the demand for oil is inelastic over short periods of time. 
C)  both the supply of oil and the demand for oil are inelastic over short periods of time. 
D)  the supply of oil and the demand for oil are perfectly elastic over short periods of time.

Question 15

Suppose a 4 percent increase in price results in a 2 percent increase in the quantity supplied of a good.Calculate the price elasticity of supply and characterize the product.

Accepted Answer

A)  2; The product is elastic. 
B)  0.2; The product is inelastic. 
C)  0.5; The product is inelastic. 
D)  50%; The product is inelastic. 
A)  2; The product is elastic. 
B)  0.2; The product is inelastic. 
C)  0.5; The product is inelastic. 
D)  50%; The product is inelastic.

Figure 6-5 -Refer to Figure 6-5.The section of the demand curve labeled "A" represents

If the price elasticity of demand for insulin is equal to zero then the demand curve for insulin is

The slope of a demand curve is not used to measure the price elasticity of demand because

When demand is unit-elastic,a change in price causes total revenue to stay the same because

When the price of tortilla chips rose by 10 percent,the quantity of tortilla chips sold fell 4 percent.This indicates that the demand for tortilla chips is

If,for a given percentage increase in price,quantity supplied increases by a proportionately larger percentage,then supply is

The price elasticity of supply measures

If tolls on a toll road can be raised significantly before commuters will consider using a free alternative,demand for using the toll road must be

The price of wheat has fallen since 1950.Which of the following explains this price decline?

Suppose the California Nurses Union successfully secured a 12 percent increase in the wages of registered nurses.If a hospital responds by reducing the quantity of registered nurses hired and increasing the quantity of physician's assistants hired,what conclusion can you draw?

The midpoint formula is used to measure the elasticity of demand between two points on a demand curve

Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09.This means that

Shifts in the supply of oil have caused large changes in price since the 1970s because

Suppose a 4 percent increase in price results in a 2 percent increase in the quantity supplied of a good.Calculate the price elasticity of supply and characterize the product.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters

Exam 6: Elasticity: The Responsiveness of Demand and Supply

Figure 6-5 -Refer to Figure 6-5.The section of the demand curve labeled "A" represents

If the price elasticity of demand for insulin is equal to zero then the demand curve for insulin is

The slope of a demand curve is not used to measure the price elasticity of demand because

When demand is unit-elastic,a change in price causes total revenue to stay the same because

When the price of tortilla chips rose by 10 percent,the quantity of tortilla chips sold fell 4 percent.This indicates that the demand for tortilla chips is

If,for a given percentage increase in price,quantity supplied increases by a proportionately larger percentage,then supply is

The price elasticity of supply measures

If tolls on a toll road can be raised significantly before commuters will consider using a free alternative,demand for using the toll road must be

The price of wheat has fallen since 1950.Which of the following explains this price decline?

Suppose the California Nurses Union successfully secured a 12 percent increase in the wages of registered nurses.If a hospital responds by reducing the quantity of registered nurses hired and increasing the quantity of physician's assistants hired,what conclusion can you draw?

The midpoint formula is used to measure the elasticity of demand between two points on a demand curve

Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09.This means that

Shifts in the supply of oil have caused large changes in price since the 1970s because

Suppose a 4 percent increase in price results in a 2 percent increase in the quantity supplied of a good.Calculate the price elasticity of supply and characterize the product.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters