Question 1

You are more sensitive to a change in price if you

Accepted Answer

A) spend a lot of your income on the good. 
B) spend a small percentage of your income on the good. 
C) buy very little of the good. 
D) do not buy the good regularly. 
E) have a very inelastic demand for the good. 
A) spend a lot of your income on the good. 
B) spend a small percentage of your income on the good. 
C) buy very little of the good. 
D) do not buy the good regularly. 
E) have a very inelastic demand for the good. A

Question 2

Which of the following is correct?
I.All linear demand curves have a constant slope and a constant price elasticity of demand.
Ii.The price elasticity of demand changes while moving along a downward-sloping linear demand curve.
Iii.The magnitude of the slope of all linear demand curves is equal to the price elasticity of demand.

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) i and ii 
E) i,ii,and iii 
A) i only 
B) ii only 
C) iii only 
D) i and ii 
E) i,ii,and iii B

Question 3

-In the figure above,using the midpoint method,what is the price elasticity of demand between points A and B?

Accepted Answer

A) 0.05 
B) 0.13 
C) 0.43 
D) 1.00 
E) 2.33 
A) 0.05 
B) 0.13 
C) 0.43 
D) 1.00 
E) 2.33 C

Question 4

The price elasticity of supply equals the percentage change in the

Accepted Answer

A) quantity demanded divided by the percentage change in the price of a substitute or complement. 
B) quantity supplied divided by the percentage change in price. 
C) quantity demanded divided by the percentage change in price. 
D) supply divided by the percentage change in the demand. 
E) quantity supplied divided by the percentage change in the quantity demanded. 
A) quantity demanded divided by the percentage change in the price of a substitute or complement. 
B) quantity supplied divided by the percentage change in price. 
C) quantity demanded divided by the percentage change in price. 
D) supply divided by the percentage change in the demand. 
E) quantity supplied divided by the percentage change in the quantity demanded.

Question 5

If the price of a good rises,then moving along a demand curve the percentage change in the quantity demanded will be

Accepted Answer

A) positive. 
B) negative. 
C) zero. 
D) either positive,negative,or zero depending on how the demand curve shifted. 
E) undefined. 
A) positive. 
B) negative. 
C) zero. 
D) either positive,negative,or zero depending on how the demand curve shifted. 
E) undefined.

Question 6

Suppose Starbucks currently charges $2.50 per cup for its latte.If Starbucks raises the price to $3.00 per cup,based on the demand curve in the figure above,its total revenue will ________ because the demand for Starbucks latte is ________ over this price range.

Accepted Answer

A) increase;elastic 
B) decrease;elastic 
C) increase;inelastic 
D) increase;unit elastic 
E) not change;unit elastic 
A) increase;elastic 
B) decrease;elastic 
C) increase;inelastic 
D) increase;unit elastic 
E) not change;unit elastic

Question 7

If a decrease in price increases total revenue,what can you determine about the elasticity of demand for the good?

Accepted Answer

If a decrease in price increas

Question 8

-The demand curve shown in the figure above is ________ over the price range from $95 to $105 per unit.

Accepted Answer

A) perfectly elastic 
B) perfectly inelastic 
C) unit elastic 
D) elastic but not perfectly elastic 
E) inelastic but not perfectly inelastic 
A) perfectly elastic 
B) perfectly inelastic 
C) unit elastic 
D) elastic but not perfectly elastic 
E) inelastic but not perfectly inelastic

Question 9

When the percentage change in the quantity supplied equals the percentage change in price,the supply is

Accepted Answer

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

Question 10

If a good has only a few,poor substitutes,is its demand elastic or inelastic?

Accepted Answer

The demand is inelastic.The fe

Question 11

The cross elasticity of demand for blank DVDs and DVD burners is likely to be

Accepted Answer

A) positive because they are substitutes. 
B) positive because they are complements. 
C) negative because they are substitutes. 
D) negative because they are complements. 
E) negative because with the advent of digital cameras,film and film cameras are inferior goods. 
A) positive because they are substitutes. 
B) positive because they are complements. 
C) negative because they are substitutes. 
D) negative because they are complements. 
E) negative because with the advent of digital cameras,film and film cameras are inferior goods.

Question 12

Which of the following is true?
I.The supply of a good is inelastic if when its price changes,the percentage change in the quantity supplied exceeds the percentage change in price.
Ii.Price elasticity of supply equals the percentage change in the quantity supplied divided by the percentage change in price.
Iii.If demand is price elastic,a rise in price leads to a decrease in total revenue.

Accepted Answer

A) only i 
B) only ii 
C) only iii 
D) i and ii 
E) ii and iii 
A) only i 
B) only ii 
C) only iii 
D) i and ii 
E) ii and iii

Question 13

The long-run price elasticity of demand for electricity is ________ the short-run price elasticity of demand for electricity.

Accepted Answer

A) greater than 
B) less than 
C) equal to 
D) not comparable to 
E) unrelated to 
A) greater than 
B) less than 
C) equal to 
D) not comparable to 
E) unrelated to

Question 14

If we ignore the negative or positive sign,the midpoint method of calculating a percentage change in price between two points on a demand curve results in

Accepted Answer

A) a smaller percentage change if the price rises than if it falls. 
B) the same percentage,regardless of whether the price increases or decreases. 
C) the price elasticity of demand. 
D) the price elasticity of supply. 
E) a higher percentage change if the price rises than if it falls. 
A) a smaller percentage change if the price rises than if it falls. 
B) the same percentage,regardless of whether the price increases or decreases. 
C) the price elasticity of demand. 
D) the price elasticity of supply. 
E) a higher percentage change if the price rises than if it falls.

Question 15

If the quantity supplied and the price change by the same percentage,then supply is

Accepted Answer

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

Question 16

Because the price elasticity of supply for jumbo jets is 0.35,the supply of jumbo jets is

Accepted Answer

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

Question 17

If the price elasticity of supply for a good is 0.75,then

Accepted Answer

A) the percentage change in the quantity supplied is less than the percentage change in price. 
B) the supply is elastic. 
C) an increase in the price boosts the quantity supplied by a larger percentage. 
D) the supply is inelastic so the demand must also be inelastic. 
E) None of the above answers is correct. 
A) the percentage change in the quantity supplied is less than the percentage change in price. 
B) the supply is elastic. 
C) an increase in the price boosts the quantity supplied by a larger percentage. 
D) the supply is inelastic so the demand must also be inelastic. 
E) None of the above answers is correct.

Question 18

Suppose a decrease in supply raises the price from $4.00 to $5.50 and decreases the quantity demanded from 2,000 to 1,500.Using the midpoint method,the elasticity of demand equals

Accepted Answer

A) 2.10. 
B) 1.11. 
C) 0.90. 
D) 0.72. 
E) None of the above answers is correct. 
A) 2.10. 
B) 1.11. 
C) 0.90. 
D) 0.72. 
E) None of the above answers is correct.

Question 19

Suppose Starbucks currently charges $3.25 per cup for its latte.If Starbucks lowers the price to $3.00 per cup,based on the demand curve in the figure above,its total revenue will ________ because the demand for Starbucks latte is ________ over this price range.

Accepted Answer

A) increase;elastic 
B) decrease;elastic 
C) increase;inelastic 
D) increase;unit elastic 
E) not change;unit elastic 
A) increase;elastic 
B) decrease;elastic 
C) increase;inelastic 
D) increase;unit elastic 
E) not change;unit elastic

Question 20

If the supply curve is ________,the elasticity of supply is ________.

Accepted Answer

A) vertical;infinite 
B) vertical;0 
C) horizontal;1 
D) horizontal;0 
E) a straight,upward sloping line through the origin;0 
A) vertical;infinite 
B) vertical;0 
C) horizontal;1 
D) horizontal;0 
E) a straight,upward sloping line through the origin;0

You are more sensitive to a change in price if you

-In the figure above,using the midpoint method,what is the price elasticity of demand between points A and B?

The price elasticity of supply equals the percentage change in the

If the price of a good rises,then moving along a demand curve the percentage change in the quantity demanded will be

Suppose Starbucks currently charges $2.50 per cup for its latte.If Starbucks raises the price to $3.00 per cup,based on the demand curve in the figure above,its total revenue will because the demand for Starbucks latte is over this price range.

If a decrease in price increases total revenue,what can you determine about the elasticity of demand for the good?

-The demand curve shown in the figure above is ________ over the price range from $95 to $105 per unit.

When the percentage change in the quantity supplied equals the percentage change in price,the supply is

If a good has only a few,poor substitutes,is its demand elastic or inelastic?

The cross elasticity of demand for blank DVDs and DVD burners is likely to be

The long-run price elasticity of demand for electricity is ________ the short-run price elasticity of demand for electricity.

If we ignore the negative or positive sign,the midpoint method of calculating a percentage change in price between two points on a demand curve results in

If the quantity supplied and the price change by the same percentage,then supply is

Because the price elasticity of supply for jumbo jets is 0.35,the supply of jumbo jets is

If the price elasticity of supply for a good is 0.75,then

Suppose a decrease in supply raises the price from $4.00 to $5.50 and decreases the quantity demanded from 2,000 to 1,500.Using the midpoint method,the elasticity of demand equals

Suppose Starbucks currently charges $3.25 per cup for its latte.If Starbucks lowers the price to $3.00 per cup,based on the demand curve in the figure above,its total revenue will because the demand for Starbucks latte is over this price range.

If the supply curve is ,the elasticity of supply is .

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 5: Elasticities of Demand and Supply

You are more sensitive to a change in price if you

-In the figure above,using the midpoint method,what is the price elasticity of demand between points A and B?

The price elasticity of supply equals the percentage change in the

If the price of a good rises,then moving along a demand curve the percentage change in the quantity demanded will be

Suppose Starbucks currently charges $2.50 per cup for its latte.If Starbucks raises the price to $3.00 per cup,based on the demand curve in the figure above,its total revenue will ________ because the demand for Starbucks latte is ________ over this price range.

If a decrease in price increases total revenue,what can you determine about the elasticity of demand for the good?

-The demand curve shown in the figure above is ________ over the price range from $95 to $105 per unit.

When the percentage change in the quantity supplied equals the percentage change in price,the supply is

If a good has only a few,poor substitutes,is its demand elastic or inelastic?

The cross elasticity of demand for blank DVDs and DVD burners is likely to be

The long-run price elasticity of demand for electricity is ________ the short-run price elasticity of demand for electricity.

If we ignore the negative or positive sign,the midpoint method of calculating a percentage change in price between two points on a demand curve results in

If the quantity supplied and the price change by the same percentage,then supply is

Because the price elasticity of supply for jumbo jets is 0.35,the supply of jumbo jets is

If the price elasticity of supply for a good is 0.75,then

Suppose a decrease in supply raises the price from $4.00 to $5.50 and decreases the quantity demanded from 2,000 to 1,500.Using the midpoint method,the elasticity of demand equals

Suppose Starbucks currently charges $3.25 per cup for its latte.If Starbucks lowers the price to $3.00 per cup,based on the demand curve in the figure above,its total revenue will ________ because the demand for Starbucks latte is ________ over this price range.

If the supply curve is ________,the elasticity of supply is ________.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Suppose Starbucks currently charges $2.50 per cup for its latte.If Starbucks raises the price to $3.00 per cup,based on the demand curve in the figure above,its total revenue will because the demand for Starbucks latte is over this price range.

Suppose Starbucks currently charges $3.25 per cup for its latte.If Starbucks lowers the price to $3.00 per cup,based on the demand curve in the figure above,its total revenue will because the demand for Starbucks latte is over this price range.

If the supply curve is ,the elasticity of supply is .