Question 1

If the cross elasticity of demand between good A and good B is negative,then a decrease in the price of good A results in

Accepted Answer

A) an increase in the demand for good B. 
B) a decrease in the demand for good B. 
C) a movement downward along the demand curve for good B. 
D) an increase in the supply of good B. 
E) a decrease in the supply of good B. 
A) an increase in the demand for good B. 
B) a decrease in the demand for good B. 
C) a movement downward along the demand curve for good B. 
D) an increase in the supply of good B. 
E) a decrease in the supply of good B.

Question 2

If the percentage change in the quantity demanded is not zero but is less than the percentage change in the price,demand 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 3

What is the price elasticity of demand? In terms of percentage changes,what is its formula?

Accepted Answer

The price elasticity of demand is a meas

Question 4

If a small percentage change in the price brings a very large percentage change in the quantity supplied,then the supply is almost perfectly ________ and the supply curve is almost ________.

Accepted Answer

A) elastic;vertical 
B) elastic;horizontal 
C) inelastic;horizontal 
D) inelastic;vertical 
E) elastic;45 degrees 
A) elastic;vertical 
B) elastic;horizontal 
C) inelastic;horizontal 
D) inelastic;vertical 
E) elastic;45 degrees

Question 5

The price elasticity of demand measures which of the following?

Accepted Answer

A) the slope of the demand curve 
B) the rate at which demand changes when price changes 
C) how responsive the quantity demanded is to changes in price 
D) the percentage-slope of the demand curve 
E) None of these correctly defines what price elasticity of demand measures. 
A) the slope of the demand curve 
B) the rate at which demand changes when price changes 
C) how responsive the quantity demanded is to changes in price 
D) the percentage-slope of the demand curve 
E) None of these correctly defines what price elasticity of demand measures.

Question 6

The price of lumber increased by 10 percent and the quantity supplied increased by 20 percent.The supply of lumber is

Accepted Answer

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

Question 7

Suppose the demand for peaches sold from one roadside stand in Georgia is perfectly elastic.As a result,a 7 percent increase in the price charged by the owner of this stand leads to

Accepted Answer

A) zero peaches sold by this stand. 
B) no change in the quantity demanded at this stand. 
C) a 7 percent decrease in the quantity demanded at this stand. 
D) a 7 percent decrease in demand at this stand. 
E) a virtually infinite increase in the quantity demanded at this stand. 
A) zero peaches sold by this stand. 
B) no change in the quantity demanded at this stand. 
C) a 7 percent decrease in the quantity demanded at this stand. 
D) a 7 percent decrease in demand at this stand. 
E) a virtually infinite increase in the quantity demanded at this stand.

Question 8

List factors that increase the price elasticity of supply.

Accepted Answer

Factors that increase the price elastici

Question 9

You own a small store.Your cashier thinks you should raise prices to increase your total revenue and your customer thinks you should lower prices to increase your total revenue.The cashier thinks the price elasticity of demand is ________ and the customer believes the price elasticity of demand is ________.

Accepted Answer

A) inelastic;elastic 
B) elastic;inelastic 
C) elastic;elastic 
D) inelastic;inelastic 
E) unit elastic;elastic 
A) inelastic;elastic 
B) elastic;inelastic 
C) elastic;elastic 
D) inelastic;inelastic 
E) unit elastic;elastic

Question 10

Suppose the price of a DVD rose from $15 to $17 and the quantity demanded decreased from 1,000 per month to 900 per month.Using the midpoint formula,the ________ percent change in price led to a ________ percent change in the quantity demanded.

Accepted Answer

A) 12.5;10.5 
B) 13.3;10.0 
C) 11.8;11.1 
D) 8.0;9.5 
E) None of the above answers is correct. 
A) 12.5;10.5 
B) 13.3;10.0 
C) 11.8;11.1 
D) 8.0;9.5 
E) None of the above answers is correct.

Question 11

All of the following statements are true EXCEPT

Accepted Answer

A) the demand for food is less elastic than the demand for a Hawaiian vacation. 
B) the demand for clothing is less elastic than the demand for blue jeans. 
C) the demand for gasoline is more elastic the longer the time elapsed. 
D) the smaller the proportion of income spent on a good,the more inelastic demand will be. 
E) the demand for Nike running shoes is less elastic than the demand for shoes. 
A) the demand for food is less elastic than the demand for a Hawaiian vacation. 
B) the demand for clothing is less elastic than the demand for blue jeans. 
C) the demand for gasoline is more elastic the longer the time elapsed. 
D) the smaller the proportion of income spent on a good,the more inelastic demand will be. 
E) the demand for Nike running shoes is less elastic than the demand for shoes.

Question 12

Perfectly inelastic demand means that consumers

Accepted Answer

A) are willing to buy any quantity of the good at a given price,but none at higher prices. 
B) decrease their consumption as price rises. 
C) increase their consumption as price rises. 
D) will buy a certain quantity,regardless of price. 
E) will buy a huge,almost infinite amount more,if the price falls just a little. 
A) are willing to buy any quantity of the good at a given price,but none at higher prices. 
B) decrease their consumption as price rises. 
C) increase their consumption as price rises. 
D) will buy a certain quantity,regardless of price. 
E) will buy a huge,almost infinite amount more,if the price falls just a little.

Question 13

When the price of a pizza is $10,the quantity of soda demanded is 300 drinks.When the price of a pizza is $15,the quantity soda demanded is 100 drinks.The cross elasticity of demand is equal to

Accepted Answer

A) -0.25. 
B) -0.40. 
C) -2.50. 
D) -25.00. 
E) 4.00. 
A) -0.25. 
B) -0.40. 
C) -2.50. 
D) -25.00. 
E) 4.00.

Question 14

The demand for oil is inelastic.So,does an increase in the price of oil mean an increase in total revenue or a decrease in total revenue for oil producers?

Accepted Answer

Because the demand is inelasti

Question 15

When the percentage change in the quantity supplied is twice the percentage change in price,then supply is

Accepted Answer

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

Question 16

What happens to the price elasticity of demand moving down along a downward-sloping,linear demand curve?

Accepted Answer

Moving down along a downward-sloping,lin

Question 17

If a product is narrowly defined,it is likely to

Accepted Answer

A) have many substitutes and therefore its demand is elastic. 
B) have few substitutes,and therefore its demand is less elastic. 
C) be unique,and therefore its demand is inelastic. 
D) be unique and have many substitutes. 
E) have a larger proportion of income spent on it. 
A) have many substitutes and therefore its demand is elastic. 
B) have few substitutes,and therefore its demand is less elastic. 
C) be unique,and therefore its demand is inelastic. 
D) be unique and have many substitutes. 
E) have a larger proportion of income spent on it.

Question 18

-In the figure above,at which point (a,b,or c)along the linear demand curve illustrated would demand be
a.most elastic?
b.most inelastic?

Accepted Answer

a.The demand would b

Question 19

One reason why the demand for gasoline is inelastic is because

Accepted Answer

A) substitutes for gas abound. 
B) substitutes for gas are hard to find. 
C) gasoline is a luxury item. 
D) people have a long time to shop around for automobiles that use less gas. 
E) buses run on diesel fuel rather than gasoline. 
A) substitutes for gas abound. 
B) substitutes for gas are hard to find. 
C) gasoline is a luxury item. 
D) people have a long time to shop around for automobiles that use less gas. 
E) buses run on diesel fuel rather than gasoline.

Question 20

If a 20 percent increase in the price of a good does not change the quantity supplied,the

Accepted Answer

A) supply is perfectly inelastic. 
B) supply is unit elastic. 
C) supply is perfectly elastic. 
D) supply is elastic. 
E) None of the above answers is correct. 
A) supply is perfectly inelastic. 
B) supply is unit elastic. 
C) supply is perfectly elastic. 
D) supply is elastic. 
E) None of the above answers is correct.

If the cross elasticity of demand between good A and good B is negative,then a decrease in the price of good A results in

If the percentage change in the quantity demanded is not zero but is less than the percentage change in the price,demand is

What is the price elasticity of demand? In terms of percentage changes,what is its formula?

If a small percentage change in the price brings a very large percentage change in the quantity supplied,then the supply is almost perfectly and the supply curve is almost .

The price elasticity of demand measures which of the following?

The price of lumber increased by 10 percent and the quantity supplied increased by 20 percent.The supply of lumber is

Suppose the demand for peaches sold from one roadside stand in Georgia is perfectly elastic.As a result,a 7 percent increase in the price charged by the owner of this stand leads to

List factors that increase the price elasticity of supply.

You own a small store.Your cashier thinks you should raise prices to increase your total revenue and your customer thinks you should lower prices to increase your total revenue.The cashier thinks the price elasticity of demand is and the customer believes the price elasticity of demand is .

Suppose the price of a DVD rose from $15 to $17 and the quantity demanded decreased from 1,000 per month to 900 per month.Using the midpoint formula,the percent change in price led to a percent change in the quantity demanded.

All of the following statements are true EXCEPT

Perfectly inelastic demand means that consumers

When the price of a pizza is $10,the quantity of soda demanded is 300 drinks.When the price of a pizza is $15,the quantity soda demanded is 100 drinks.The cross elasticity of demand is equal to

The demand for oil is inelastic.So,does an increase in the price of oil mean an increase in total revenue or a decrease in total revenue for oil producers?

When the percentage change in the quantity supplied is twice the percentage change in price,then supply is

What happens to the price elasticity of demand moving down along a downward-sloping,linear demand curve?

If a product is narrowly defined,it is likely to

-In the figure above,at which point (a,b,or c)along the linear demand curve illustrated would demand be a.most elastic? b.most inelastic?

One reason why the demand for gasoline is inelastic is because

If a 20 percent increase in the price of a good does not change the quantity supplied,the

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

If the cross elasticity of demand between good A and good B is negative,then a decrease in the price of good A results in

If the percentage change in the quantity demanded is not zero but is less than the percentage change in the price,demand is

What is the price elasticity of demand? In terms of percentage changes,what is its formula?

If a small percentage change in the price brings a very large percentage change in the quantity supplied,then the supply is almost perfectly ________ and the supply curve is almost ________.

The price elasticity of demand measures which of the following?

The price of lumber increased by 10 percent and the quantity supplied increased by 20 percent.The supply of lumber is

Suppose the demand for peaches sold from one roadside stand in Georgia is perfectly elastic.As a result,a 7 percent increase in the price charged by the owner of this stand leads to

List factors that increase the price elasticity of supply.

Suppose the price of a DVD rose from $15 to $17 and the quantity demanded decreased from 1,000 per month to 900 per month.Using the midpoint formula,the ________ percent change in price led to a ________ percent change in the quantity demanded.

All of the following statements are true EXCEPT

Perfectly inelastic demand means that consumers

When the price of a pizza is $10,the quantity of soda demanded is 300 drinks.When the price of a pizza is $15,the quantity soda demanded is 100 drinks.The cross elasticity of demand is equal to

The demand for oil is inelastic.So,does an increase in the price of oil mean an increase in total revenue or a decrease in total revenue for oil producers?

When the percentage change in the quantity supplied is twice the percentage change in price,then supply is

What happens to the price elasticity of demand moving down along a downward-sloping,linear demand curve?

If a product is narrowly defined,it is likely to

-In the figure above,at which point (a,b,or c)along the linear demand curve illustrated would demand be a.most elastic? b.most inelastic?

One reason why the demand for gasoline is inelastic is because

If a 20 percent increase in the price of a good does not change the quantity supplied,the

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

If a small percentage change in the price brings a very large percentage change in the quantity supplied,then the supply is almost perfectly and the supply curve is almost .

Suppose the price of a DVD rose from $15 to $17 and the quantity demanded decreased from 1,000 per month to 900 per month.Using the midpoint formula,the percent change in price led to a percent change in the quantity demanded.