Question 1

If the elasticity of demand coefficient for a good is one-sixth (in absolute terms), we know:

Accepted Answer

A) ​that for every 1% increase in quantity, there will be a 6% increase in price. 
B) ​that for every 1% increase in quantity, there will be a 6% decrease in price. 
C) ​that for every 6% increase in quantity, there will be a 1% increase in price. 
D) ​that for every 6% increase in quantity, there will be a 1% decrease in price. 
A) ​that for every 1% increase in quantity, there will be a 6% increase in price. 
B) ​that for every 1% increase in quantity, there will be a 6% decrease in price. 
C) ​that for every 6% increase in quantity, there will be a 1% increase in price. 
D) ​that for every 6% increase in quantity, there will be a 1% decrease in price.

Question 2

The flatter the demand curve passing through a given point, the less elastic the demand curve at that point.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following would be most inelastic with regard to price?

Accepted Answer

A) ​a Samsung LCD television 
B) ​a Sony LCD television 
C) ​all LCD televisions 
D) ​Demand for all of the above would be equally elastic because none are necessities. 
A) ​a Samsung LCD television 
B) ​a Sony LCD television 
C) ​all LCD televisions 
D) ​Demand for all of the above would be equally elastic because none are necessities.

Question 4

A positive income elasticity of demand for a good means:

Accepted Answer

A) ​it is a substitute. 
B) ​it is a complement. 
C) ​it is a normal good. 
D) ​it is an inferior good. 
A) ​it is a substitute. 
B) ​it is a complement. 
C) ​it is a normal good. 
D) ​it is an inferior good.

Question 5

To assess whether or not a good is normal or inferior, economists are interested in the cross price elasticity of demand.

Accepted Answer

A) True 
 B)False

Question 6

If the demand curve is perfectly inelastic, then an increase in supply will:

Accepted Answer

A) ​increase both the price and the quantity exchanged. 
B) ​increase the price but result in no change in the quantity exchanged. 
C) ​increase the quantity exchanged but result in no change in the price. 
D) ​decrease the price but result in no change in the quantity exchanged. 
A) ​increase both the price and the quantity exchanged. 
B) ​increase the price but result in no change in the quantity exchanged. 
C) ​increase the quantity exchanged but result in no change in the price. 
D) ​decrease the price but result in no change in the quantity exchanged.

Question 7

Hot dogs and hot dog buns are complementary goods. The cross price elasticity between hot dogs and hot dog buns:

Accepted Answer

A) ​is positive. 
B) ​is equal to zero. 
C) ​is negative. 
D) ​could be any of the above. 
A) ​is positive. 
B) ​is equal to zero. 
C) ​is negative. 
D) ​could be any of the above.

Question 8

Sellers of a good will bear the larger part of the tax burden, and buyers will bear a smaller part of the tax burden, when the

Accepted Answer

A) ​tax is placed on the sellers of the good. 
B) ​tax is placed on the buyers of the good. 
C) ​supply of the good is more elastic than the demand for the product. 
D) ​demand for the good is more elastic than the supply of the product. 
A) ​tax is placed on the sellers of the good. 
B) ​tax is placed on the buyers of the good. 
C) ​supply of the good is more elastic than the demand for the product. 
D) ​demand for the good is more elastic than the supply of the product.

Question 9

Arrange the following goods from least to most elastic, explaining your ordering: gasoline, Shell gasoline, and Shell gasoline at a particular gas station.

Accepted Answer

Gasoline is least elastic, since there a

Question 10

A perfectly inelastic supply curve is:

Accepted Answer

A) ​upward sloping to the right. 
B) ​downward sloping to the left. 
C) ​horizontal. 
D) ​vertical. 
A) ​upward sloping to the right. 
B) ​downward sloping to the left. 
C) ​horizontal. 
D) ​vertical.

Question 11

Among the following pairs, which is likely to have the greatest price elasticity of demand? Why?
a.cars or Toyotas
b.electricity usage during a month or during a year
c.cable television or an apartment rental

Accepted Answer

​
a.
The price elasticity of demand is l

If the elasticity of demand coefficient for a good is one-sixth (in absolute terms), we know:

The flatter the demand curve passing through a given point, the less elastic the demand curve at that point.

Which of the following would be most inelastic with regard to price?

A positive income elasticity of demand for a good means:

To assess whether or not a good is normal or inferior, economists are interested in the cross price elasticity of demand.

If the demand curve is perfectly inelastic, then an increase in supply will:

Hot dogs and hot dog buns are complementary goods. The cross price elasticity between hot dogs and hot dog buns:

Sellers of a good will bear the larger part of the tax burden, and buyers will bear a smaller part of the tax burden, when the

Arrange the following goods from least to most elastic, explaining your ordering: gasoline, Shell gasoline, and Shell gasoline at a particular gas station.

A perfectly inelastic supply curve is:

Among the following pairs, which is likely to have the greatest price elasticity of demand? Why? a.cars or Toyotas b.electricity usage during a month or during a year c.cable television or an apartment rental

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Exam 6: Elasticities

If the elasticity of demand coefficient for a good is one-sixth (in absolute terms), we know:

The flatter the demand curve passing through a given point, the less elastic the demand curve at that point.

Which of the following would be most inelastic with regard to price?

A positive income elasticity of demand for a good means:

To assess whether or not a good is normal or inferior, economists are interested in the cross price elasticity of demand.

If the demand curve is perfectly inelastic, then an increase in supply will:

Hot dogs and hot dog buns are complementary goods. The cross price elasticity between hot dogs and hot dog buns:

Sellers of a good will bear the larger part of the tax burden, and buyers will bear a smaller part of the tax burden, when the

Arrange the following goods from least to most elastic, explaining your ordering: gasoline, Shell gasoline, and Shell gasoline at a particular gas station.

A perfectly inelastic supply curve is:

Among the following pairs, which is likely to have the greatest price elasticity of demand? Why? a.cars or Toyotas b.electricity usage during a month or during a year c.cable television or an apartment rental

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters