Exam 4: Subtleties of the Supply and Demand Model: Price Floors,price Ceilings,and Elasticity

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Suppose that the government imposes a sales tax on the consumption of natural gas,which of the following would have the least impact on the producers of natural gas?

(Multiple Choice)

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Question 81

If demand for a product is unit elastic,then increasing the price of the product leaves total revenue unchanged.

(True/False)

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Question 82

When supply shifts,supply elasticity affects the changes in equilibrium price and quantity.

(True/False)

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Question 83

If the price of a product increases by 10 percent and the quantity demanded decreases by 15 percent,then the

(Multiple Choice)

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Question 84

If the demand for bananas has a high price elasticity,then a 5 percent decrease in the price of bananas will result in

(Multiple Choice)

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Question 85

Suppose the price elasticity of demand for apples is 2.3 and the price elasticity of demand for housing is .65.In comparing price elasticities of demand,it is proper to say that the demand for apples is

(Multiple Choice)

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Question 86

Suppose demand is a straight line as follows: Q_d = 100 - 2P.Calculate the price elasticity of demand between the prices of $41 and $43.

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Question 87

The elasticity of demand is lower for European vehicles than for U.S.vehicles.Why do auto dealers offer substantially fewer discounts for European vehicles than for U.S.vehicles?

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Question 88

For demand to be unit elastic,

(Multiple Choice)

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Question 89

Suppose the price of a good rises from $2.25 to $3.15,and the quantity demanded changes from 2,360 units to 1,250 units.Calculate the price elasticity of demand using the midpoint formula,and indicate whether demand is elastic,inelastic,or unit elastic.

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Question 90

A product with an inelastic demand means that

(Multiple Choice)

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Question 91

If the price elasticity of demand for apples is higher than the price elasticity of demand for oranges,then a given percentage increase in the price of apples and oranges will result in more percentage decrease in the quantity demanded for apples than for oranges.

(True/False)

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Question 92

Which of the following correctly represents the midpoint formula?

(Multiple Choice)

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Question 93

The price elasticity of demand is expressed in dollar changes in price and quantity demanded.

(True/False)

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Question 94

Demand is inelastic if the price elasticity of demand is greater than 1.

(True/False)

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Question 95

If a good has negative income elasticity,then it is an inferior good.

(True/False)

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Question 96

Supply is elastic if the quantity supplied responds substantially to a change in price,and supply is inelastic if the quantity supplied responds only slightly to a change in price.

(True/False)

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Question 97

The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.

(True/False)

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Question 98

Suppose that the revenue of a product increases when its price decreases.Then demand for the product must

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Question 99

The concept that explains to what degree price changes when there is a shift in demand,other things being equal,is

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Question 100

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Exam 4: Subtleties of the Supply and Demand Model: Price Floors,price Ceilings,and Elasticity

Suppose that the government imposes a sales tax on the consumption of natural gas,which of the following would have the least impact on the producers of natural gas?

If demand for a product is unit elastic,then increasing the price of the product leaves total revenue unchanged.

When supply shifts,supply elasticity affects the changes in equilibrium price and quantity.

If the price of a product increases by 10 percent and the quantity demanded decreases by 15 percent,then the

If the demand for bananas has a high price elasticity,then a 5 percent decrease in the price of bananas will result in

Suppose the price elasticity of demand for apples is 2.3 and the price elasticity of demand for housing is .65.In comparing price elasticities of demand,it is proper to say that the demand for apples is

Suppose demand is a straight line as follows: Qd = 100 - 2P.Calculate the price elasticity of demand between the prices of $41 and $43.

The elasticity of demand is lower for European vehicles than for U.S.vehicles.Why do auto dealers offer substantially fewer discounts for European vehicles than for U.S.vehicles?

For demand to be unit elastic,

Suppose the price of a good rises from $2.25 to $3.15,and the quantity demanded changes from 2,360 units to 1,250 units.Calculate the price elasticity of demand using the midpoint formula,and indicate whether demand is elastic,inelastic,or unit elastic.

A product with an inelastic demand means that

If the price elasticity of demand for apples is higher than the price elasticity of demand for oranges,then a given percentage increase in the price of apples and oranges will result in more percentage decrease in the quantity demanded for apples than for oranges.

Which of the following correctly represents the midpoint formula?

The price elasticity of demand is expressed in dollar changes in price and quantity demanded.

Demand is inelastic if the price elasticity of demand is greater than 1.

If a good has negative income elasticity,then it is an inferior good.

Supply is elastic if the quantity supplied responds substantially to a change in price,and supply is inelastic if the quantity supplied responds only slightly to a change in price.

The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.

Suppose that the revenue of a product increases when its price decreases.Then demand for the product must

The concept that explains to what degree price changes when there is a shift in demand,other things being equal,is

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Interaction of People in Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, transfers, and Income Distribution

Public Goods, externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth and Globalization

International Trade

International Finance

Reading,understanding,and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Present Discounted Value

The Miracle of Compound Growth

Deriving the Growth Accounting Formula

Deriving the Formula for the Keynesian Multiplier and the Forward-Looking Consumption Model

Filters

Suppose demand is a straight line as follows: Q_d = 100 - 2P.Calculate the price elasticity of demand between the prices of $41 and $43.