Question 1

-Use the above figure.When the price increases from $2 to $10,total revenue

Accepted Answer

A) increases from areas A + B to areas B + C and demand is inelastic. 
B) increases from areas B + C to areas A + B and demand is inelastic. 
C) increases from areas B + C to areas A + D and demand is elastic. 
D) increases from areas C + D to areas B + A and demand is elastic. 
A) increases from areas A + B to areas B + C and demand is inelastic. 
B) increases from areas B + C to areas A + B and demand is inelastic. 
C) increases from areas B + C to areas A + D and demand is elastic. 
D) increases from areas C + D to areas B + A and demand is elastic.

Question 2

The price elasticity of demand measures

Accepted Answer

A) changes in demand. 
B) how responsive producers are to a change in demand. 
C) how responsive consumers are to a change in price. 
D) how responsive consumers are to a change in income. 
A) changes in demand. 
B) how responsive producers are to a change in demand. 
C) how responsive consumers are to a change in price. 
D) how responsive consumers are to a change in income.

Question 3

If the price of wireless phone service decreases and the demand for wired phone services decreases,then wired and wireless phone services are

Accepted Answer

A) substitutes. 
B) complements. 
C) inferior goods. 
D) elastic goods. 
A) substitutes. 
B) complements. 
C) inferior goods. 
D) elastic goods.

Question 4

Which has a more elastic demand: hamburger or beef?

Accepted Answer

Hamburger has the more elastic demand be

Question 5

If price elasticity of supply is less than 1,

Accepted Answer

A) supply is elastic. 
B) demand is elastic. 
C) demand is inelastic. 
D) supply is inelastic. 
A) supply is elastic. 
B) demand is elastic. 
C) demand is inelastic. 
D) supply is inelastic.

Question 6

If the price of hamburger meat increases by 20 percent and the quantity supplied by meat packing companies increases by 30 percent,what is the price elasticity of supply?

Accepted Answer

A) 1.65 
B) 1.20 
C) 0.67 
D) 1.50 
A) 1.65 
B) 1.20 
C) 0.67 
D) 1.50

Question 7

The price elasticity of supply

Accepted Answer

A) is the slope of the supply curve. 
B) is the percentage change in quantity supplied divided by the percentage change in price. 
C) is always negative. 
D) does not vary between the long and the short run. 
A) is the slope of the supply curve. 
B) is the percentage change in quantity supplied divided by the percentage change in price. 
C) is always negative. 
D) does not vary between the long and the short run.

Question 8

A vertical demand curve has

Accepted Answer

A) infinite elasticity. 
B) positive elasticity. 
C) zero elasticity. 
D) negative elasticity. 
A) infinite elasticity. 
B) positive elasticity. 
C) zero elasticity. 
D) negative elasticity.

Question 9

$$\begin{array} { c c c c } 
\text { Period } & \text { Income/Week } & \begin{array} { c } 
\text { Pounds of Artisan } \
\text { Bread Sold }
\end{array} & \begin{array} { l } 
\text { Jars of } \
\text { Jam Sold }
\end{array} \
\hline 1 & \$ 250 & 2 & 10 \
2 & \$ 500 & 5 & 8 \
\hline
\end{array}$$
-Use the above table.Based on the information in the table,artisan bread is a(n)

Accepted Answer

A) normal good. 
B) necessary good. 
C) inferior good. 
D) negative good. 
A) normal good. 
B) necessary good. 
C) inferior good. 
D) negative good.

Question 10

-Refer to the above figure.Demand will be inelastic when quantity is between

Accepted Answer

A) 0 and A. 
B) 0 and B. 
C) A and B. 
D) B and C. 
A) 0 and A. 
B) 0 and B. 
C) A and B. 
D) B and C.

Question 11

Whenever the absolute value of the price elasticity of demand is greater than 1,but less than infinite,

Accepted Answer

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

Question 12

-In the above figure,along which range would the demand for this good be most elastic?

Accepted Answer

A) Between point a and point b 
B) Between point c and point d 
C) Between point d and point e 
D) At point e 
A) Between point a and point b 
B) Between point c and point d 
C) Between point d and point e 
D) At point e

Question 13

When the consumer spends over 50% of her income on a good,demand will be

Accepted Answer

A) elastic. 
B) unit-elastic. 
C) inelastic. 
D) elastic,unit-elastic or inelastic depending upon supply. 
A) elastic. 
B) unit-elastic. 
C) inelastic. 
D) elastic,unit-elastic or inelastic depending upon supply.

Question 14

When Fred's income was $100 per week,10 units of good X were demanded.Now his income is $150 per week and 12 units of good X are demanded.Using the percentage change formula,the income elasticity of demand for good X equals ________.

Accepted Answer

A) 0.45 
B) 0.40 
C) 2.20 
D) 2.50 
A) 0.45 
B) 0.40 
C) 2.20 
D) 2.50

Question 15

If the absolute price elasticity of demand for good Y is 0.75,when there is a 30 percent increase in price,we can conclude that quantity demanded

Accepted Answer

A) has fallen by 35.0 percent. 
B) has fallen by 10.4 percent. 
C) has fallen by 22.5 percent. 
D) has fallen by 40.0 percent. 
A) has fallen by 35.0 percent. 
B) has fallen by 10.4 percent. 
C) has fallen by 22.5 percent. 
D) has fallen by 40.0 percent.

Question 16

Elastic demand implies

Accepted Answer

A) that a one percent increase in price results in a smaller than one percent decrease in quantity demanded. 
B) that a one percent increase in price results in a larger than one percent decrease in quantity demanded. 
C) that a one percent cut in price results in a larger than one percent increase in quantity demanded. 
D) that a one percent decrease or increase in price induces no change in total revenue. 
A) that a one percent increase in price results in a smaller than one percent decrease in quantity demanded. 
B) that a one percent increase in price results in a larger than one percent decrease in quantity demanded. 
C) that a one percent cut in price results in a larger than one percent increase in quantity demanded. 
D) that a one percent decrease or increase in price induces no change in total revenue.

Question 17

The price elasticity of demand is

Accepted Answer

A) always positive,so there is no reason to consider the absolute value of the price elasticity of demand. 
B) always negative,but by convention,economists typically express the price elasticity of demand as an absolute value. 
C) always equal to -1,which by convention economists typically express as an absolute value,or 1. 
D) always equal to zero,so there is no reason to consider the absolute value of the price elasticity of demand. 
A) always positive,so there is no reason to consider the absolute value of the price elasticity of demand. 
B) always negative,but by convention,economists typically express the price elasticity of demand as an absolute value. 
C) always equal to -1,which by convention economists typically express as an absolute value,or 1. 
D) always equal to zero,so there is no reason to consider the absolute value of the price elasticity of demand.

Question 18

The price elasticity of demand is a measure of

Accepted Answer

A) the responsiveness of the quantity demanded of a good to a changes in the price of the good. 
B) the quantity demanded of a good at a given price. 
C) the demand for a product holding prices constant. 
D) the horizontal shift in the demand curve when the price of a good changes. 
A) the responsiveness of the quantity demanded of a good to a changes in the price of the good. 
B) the quantity demanded of a good at a given price. 
C) the demand for a product holding prices constant. 
D) the horizontal shift in the demand curve when the price of a good changes.

Question 19

Which of the following is more likely to have perfectly elastic or nearly perfectly elastic demand?

Accepted Answer

A) a textbook required for an economics course 
B) the guitar produced by a master craftsman 
C) milk produced by a Wisconsin dairy farmer 
D) the services offered by the only allergist in the community 
A) a textbook required for an economics course 
B) the guitar produced by a master craftsman 
C) milk produced by a Wisconsin dairy farmer 
D) the services offered by the only allergist in the community

Question 20

A supply curve that is parallel to the price axis is

Accepted Answer

A) perfectly elastic. 
B) perfectly inelastic. 
C) relatively inelastic. 
D) unitary elastic. 
A) perfectly elastic. 
B) perfectly inelastic. 
C) relatively inelastic. 
D) unitary elastic.

Exam 6: Demand and Supply Elasticity

-Use the above figure.When the price increases from $2 to $10,total revenue

The price elasticity of demand measures

If the price of wireless phone service decreases and the demand for wired phone services decreases,then wired and wireless phone services are

Which has a more elastic demand: hamburger or beef?

If price elasticity of supply is less than 1,

If the price of hamburger meat increases by 20 percent and the quantity supplied by meat packing companies increases by 30 percent,what is the price elasticity of supply?

The price elasticity of supply

A vertical demand curve has

Period Income/Week Pounds of Artisan Bread Sold Jars of Jam Sold 1 \ 250 2 10 2 \ 500 5 8 -Use the above table.Based on the information in the table,artisan bread is a(n)

-Refer to the above figure.Demand will be inelastic when quantity is between

Whenever the absolute value of the price elasticity of demand is greater than 1,but less than infinite,

-In the above figure,along which range would the demand for this good be most elastic?

When the consumer spends over 50% of her income on a good,demand will be

When Fred's income was $100 per week,10 units of good X were demanded.Now his income is $150 per week and 12 units of good X are demanded.Using the percentage change formula,the income elasticity of demand for good X equals ________.

If the absolute price elasticity of demand for good Y is 0.75,when there is a 30 percent increase in price,we can conclude that quantity demanded

Elastic demand implies

The price elasticity of demand is

The price elasticity of demand is a measure of

Which of the following is more likely to have perfectly elastic or nearly perfectly elastic demand?

A supply curve that is parallel to the price axis is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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