Question 1

What is the formula for the price elasticity of demand? 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) quantity demanded divided by the percentage change in income. 
E) equilibrium quantity demanded divided by the equilibrium price. 
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) quantity demanded divided by the percentage change in income. 
E) equilibrium quantity demanded divided by the equilibrium price.

Question 2

Suppose an increase in demand causes the price to increase from $2 to $4 and the quantity to increase from 1,000 to 1,800.Using the midpoint method,the elasticity of supply equals

Accepted Answer

A) 0.86. 
B) 1.17. 
C) 2.74. 
D) 0.68. 
E) None of the above answers is correct. 
A) 0.86. 
B) 1.17. 
C) 2.74. 
D) 0.68. 
E) None of the above answers is correct.

Question 3

-In the figure above,using the midpoint method,the price elasticity of demand when the price falls from $6 to $5 is equal to

Accepted Answer

A) 2.50. 
B) 1.63. 
C) 1.10. 
D) 0.91. 
E) 1.00. 
A) 2.50. 
B) 1.63. 
C) 1.10. 
D) 0.91. 
E) 1.00.

Question 4

A ________ curve means that ________.

Accepted Answer

A) horizontal demand;a change in price does not change total revenue 
B) horizontal demand;the elasticity of demand is less than 1 
C) horizontal supply;the elasticity of supply is infinite 
D) horizontal supply;the elasticity of demand is infinite 
E) vertical demand;a change in price does not change total revenue 
A) horizontal demand;a change in price does not change total revenue 
B) horizontal demand;the elasticity of demand is less than 1 
C) horizontal supply;the elasticity of supply is infinite 
D) horizontal supply;the elasticity of demand is infinite 
E) vertical demand;a change in price does not change total revenue

Question 5

If demand is inelastic and the price falls,the total revenue

Accepted Answer

A) rises. 
B) falls. 
C) remains constant. 
D) might rise,fall,or remain constant. 
E) becomes negative. 
A) rises. 
B) falls. 
C) remains constant. 
D) might rise,fall,or remain constant. 
E) becomes negative.

Question 6

The demand for necessities generally is ________ the demand for luxury goods.

Accepted Answer

A) as elastic as 
B) more elastic than 
C) less elastic than 
D) flatter than 
E) not comparable to 
A) as elastic as 
B) more elastic than 
C) less elastic than 
D) flatter than 
E) not comparable to

Question 7

Which of the following is most likely to have an income elasticity of demand that exceeds 1?

Accepted Answer

A) tobacco 
B) alcoholic beverages 
C) airline travel 
D) food 
E) telephone 
A) tobacco 
B) alcoholic beverages 
C) airline travel 
D) food 
E) telephone

Question 8

The price elasticity of demand is a measure of

Accepted Answer

A) the equilibrium price of a product. 
B) buyers' responsiveness to changes in the price of a product. 
C) the amount of a product purchased when income increases. 
D) whether a product is a substitute or a complement. 
E) how much a change in demand affects the equilibrium price. 
A) the equilibrium price of a product. 
B) buyers' responsiveness to changes in the price of a product. 
C) the amount of a product purchased when income increases. 
D) whether a product is a substitute or a complement. 
E) how much a change in demand affects the equilibrium price.

Question 9

The income elasticity of demand is

Accepted Answer

A) positive for a normal good. 
B) zero for an inferior good. 
C) less than one for an income elastic normal good. 
D) Only answers A and B are correct. 
E) Answers A,B,and C are correct. 
A) positive for a normal good. 
B) zero for an inferior good. 
C) less than one for an income elastic normal good. 
D) Only answers A and B are correct. 
E) Answers A,B,and C are correct.

Question 10

What factors determine the size of the price elasticity of demand?

Accepted Answer

The factors that determine the size of t

Question 11

For a good such as a large screen HD television set,the income elasticity would likely be

Accepted Answer

A) negative. 
B) equal to zero. 
C) positive and less than one. 
D) positive and greater than one. 
E) undefined because large screen,HD TVs are bought by many consumers. 
A) negative. 
B) equal to zero. 
C) positive and less than one. 
D) positive and greater than one. 
E) undefined because large screen,HD TVs are bought by many consumers.

Question 12

If the cross elasticity of demand between peanut butter and milk is -1.11,then are peanut butter and milk substitutes or complements?

Accepted Answer

Because the cross el

Question 13

If the price of suntan lotion increases from $6 to $8 per bottle and quantity demanded decreases from 900,000 bottles to 845,000 bottles,using the midpoint method,what is the price elasticity of demand for suntan lotion?

Accepted Answer

The price elasticity of demand = (percen

Question 14

If an Atlanta bakery raises the price of their rye bread by 11 percent and the quantity demanded decreases by 11 percent,then the demand for the rye bread is ________ and the bakery's total revenue ________.

Accepted Answer

A) unit elastic;does not change 
B) unit elastic;increases 
C) unit elastic;decreases 
D) elastic;does not change 
E) inelastic;does not change 
A) unit elastic;does not change 
B) unit elastic;increases 
C) unit elastic;decreases 
D) elastic;does not change 
E) inelastic;does not change

Question 15

Which of the following statements is correct for the price elasticity of demand along a linear,downward-sloping demand curve?

Accepted Answer

A) The price elasticity of demand is constant because the slope is constant. 
B) At low prices,demand is elastic but at high prices demand is inelastic. 
C) At high prices,demand is elastic but at low prices demand is inelastic. 
D) The price elasticity of demand is not defined for a linear demand curve because the slope is constant. 
E) None of the above answers is correct. 
A) The price elasticity of demand is constant because the slope is constant. 
B) At low prices,demand is elastic but at high prices demand is inelastic. 
C) At high prices,demand is elastic but at low prices demand is inelastic. 
D) The price elasticity of demand is not defined for a linear demand curve because the slope is constant. 
E) None of the above answers is correct.

Question 16

If the percentage change in price is 10 percent and the demand is elastic,then the percentage change in the quantity demanded

Accepted Answer

A) is greater than 0 percent but less than 10 percent. 
B) is larger than 10 percent. 
C) equals 0 percent. 
D) equals 10 percent. 
E) More information is needed to determine the magnitude of the change in the quantity demanded. 
A) is greater than 0 percent but less than 10 percent. 
B) is larger than 10 percent. 
C) equals 0 percent. 
D) equals 10 percent. 
E) More information is needed to determine the magnitude of the change in the quantity demanded.

Question 17

If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded,then demand is

Accepted Answer

A) elastic and total revenue decreases. 
B) elastic and total revenue increases. 
C) inelastic and total revenue decreases. 
D) elastic,but we cannot tell what happens to total revenue without more information. 
E) Total revenue decreases but we cannot tell if the demand is elastic or inelastic without more information. 
A) elastic and total revenue decreases. 
B) elastic and total revenue increases. 
C) inelastic and total revenue decreases. 
D) elastic,but we cannot tell what happens to total revenue without more information. 
E) Total revenue decreases but we cannot tell if the demand is elastic or inelastic without more information.

Question 18

The price elasticity of demand is always positive,as is the price elasticity of supply.Is the cross elasticity of demand always positive? Explain your answer.

Accepted Answer

No,the cross elasticity of demand is not

Question 19

When a firm raises the price of its product,what happens to its total revenue?

Accepted Answer

A) If demand is elastic,total revenue decreases. 
B) If demand is unit elastic,total revenue increases. 
C) If demand is inelastic,total revenue decreases. 
D) If demand is elastic,total revenue increases. 
E) If demand is unit elastic,total revenue decreases. 
A) If demand is elastic,total revenue decreases. 
B) If demand is unit elastic,total revenue increases. 
C) If demand is inelastic,total revenue decreases. 
D) If demand is elastic,total revenue increases. 
E) If demand is unit elastic,total revenue decreases.

Question 20

One reason why the price elasticity of supply for DVD players is greater than one is that

Accepted Answer

A) the cost of producing DVD players is small. 
B) the storage of DVD players is not possible. 
C) DVD players can be easily stored. 
D) the demand for DVD players is fairly large. 
E) DVD players require relatively advanced technology for their production. 
A) the cost of producing DVD players is small. 
B) the storage of DVD players is not possible. 
C) DVD players can be easily stored. 
D) the demand for DVD players is fairly large. 
E) DVD players require relatively advanced technology for their production.

What is the formula for the price elasticity of demand? The percentage change in the

Suppose an increase in demand causes the price to increase from $2 to $4 and the quantity to increase from 1,000 to 1,800.Using the midpoint method,the elasticity of supply equals

-In the figure above,using the midpoint method,the price elasticity of demand when the price falls from $6 to $5 is equal to

A curve means that .

If demand is inelastic and the price falls,the total revenue

The demand for necessities generally is ________ the demand for luxury goods.

Which of the following is most likely to have an income elasticity of demand that exceeds 1?

The price elasticity of demand is a measure of

The income elasticity of demand is

What factors determine the size of the price elasticity of demand?

For a good such as a large screen HD television set,the income elasticity would likely be

If the cross elasticity of demand between peanut butter and milk is -1.11,then are peanut butter and milk substitutes or complements?

If the price of suntan lotion increases from $6 to $8 per bottle and quantity demanded decreases from 900,000 bottles to 845,000 bottles,using the midpoint method,what is the price elasticity of demand for suntan lotion?

If an Atlanta bakery raises the price of their rye bread by 11 percent and the quantity demanded decreases by 11 percent,then the demand for the rye bread is and the bakery's total revenue .

Which of the following statements is correct for the price elasticity of demand along a linear,downward-sloping demand curve?

If the percentage change in price is 10 percent and the demand is elastic,then the percentage change in the quantity demanded

If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded,then demand is

The price elasticity of demand is always positive,as is the price elasticity of supply.Is the cross elasticity of demand always positive? Explain your answer.

When a firm raises the price of its product,what happens to its total revenue?

One reason why the price elasticity of supply for DVD players is greater than one is that

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

What is the formula for the price elasticity of demand? The percentage change in the

Suppose an increase in demand causes the price to increase from $2 to $4 and the quantity to increase from 1,000 to 1,800.Using the midpoint method,the elasticity of supply equals

-In the figure above,using the midpoint method,the price elasticity of demand when the price falls from $6 to $5 is equal to

A ________ curve means that ________.

If demand is inelastic and the price falls,the total revenue

The demand for necessities generally is ________ the demand for luxury goods.

Which of the following is most likely to have an income elasticity of demand that exceeds 1?

The price elasticity of demand is a measure of

The income elasticity of demand is

What factors determine the size of the price elasticity of demand?

For a good such as a large screen HD television set,the income elasticity would likely be

If the cross elasticity of demand between peanut butter and milk is -1.11,then are peanut butter and milk substitutes or complements?

If the price of suntan lotion increases from $6 to $8 per bottle and quantity demanded decreases from 900,000 bottles to 845,000 bottles,using the midpoint method,what is the price elasticity of demand for suntan lotion?

If an Atlanta bakery raises the price of their rye bread by 11 percent and the quantity demanded decreases by 11 percent,then the demand for the rye bread is ________ and the bakery's total revenue ________.

Which of the following statements is correct for the price elasticity of demand along a linear,downward-sloping demand curve?

If the percentage change in price is 10 percent and the demand is elastic,then the percentage change in the quantity demanded

If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded,then demand is

The price elasticity of demand is always positive,as is the price elasticity of supply.Is the cross elasticity of demand always positive? Explain your answer.

When a firm raises the price of its product,what happens to its total revenue?

One reason why the price elasticity of supply for DVD players is greater than one is that

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

A curve means that .

If an Atlanta bakery raises the price of their rye bread by 11 percent and the quantity demanded decreases by 11 percent,then the demand for the rye bread is and the bakery's total revenue .