Question 1

Explain the total revenue test.

Accepted Answer

The total revenue test estimates whether

Question 2

If the income elasticity of demand for a good is 2,then when income rises 10 percent,the quantity demanded

Accepted Answer

A) increases 2 percent. 
B) increases 20 percent. 
C) decreases 2 percent. 
D) decreases 20 percent. 
E) increases 12 percent. 
A) increases 2 percent. 
B) increases 20 percent. 
C) decreases 2 percent. 
D) decreases 20 percent. 
E) increases 12 percent.

Question 3

A 10 percent increase in income brings about a 15 percent decrease in the demand for a good.What is the income elasticity of demand and is the good a normal good or an inferior good?

Accepted Answer

The income elasticit

Question 4

If Microsoft wanted to prove to the Justice Department that its Windows software has many substitutes that personal computer owners can use,Microsoft hopes to find

Accepted Answer

A) that the demand for Windows is inelastic. 
B) that the demand for Windows is elastic. 
C) a large positive value for the cross elasticity of Windows and other software. 
D) a negative income elasticity for Windows. 
E) a positive income elasticity for Windows. 
A) that the demand for Windows is inelastic. 
B) that the demand for Windows is elastic. 
C) a large positive value for the cross elasticity of Windows and other software. 
D) a negative income elasticity for Windows. 
E) a positive income elasticity for Windows.

Question 5

How are the cross elasticity of demand and income elasticity of demand similar and how are they different from the price elasticity of demand?

Accepted Answer

The cross and income elasticities are si

Question 6

What are the three cases for the price elasticity of demand? Briefly define each.

Accepted Answer

Demand can be elastic,inelastic,or unit

Question 7

The price elasticity of demand is a measure of the extent to which the quantity demanded of a good changes when ________ and all other influences on buyers' plans remain the same.

Accepted Answer

A) income changes 
B) the price of a related good changes 
C) the price of the good changes 
D) the demand alone changes 
E) both the demand and the supply simultaneously change 
A) income changes 
B) the price of a related good changes 
C) the price of the good changes 
D) the demand alone changes 
E) both the demand and the supply simultaneously change

Question 8

What is the price elasticity of supply? List and briefly define three cases of the price elasticity of supply.

Accepted Answer

The price elasticity of supply measures

Question 9

The elasticity of demand is used to

Accepted Answer

A) determine if consumers will or will not buy a product. 
B) measure how responsive consumers are to a change in price. 
C) determine in what direction the demand curve shifts if income changes. 
D) find the market equilibrium. 
E) determine if a change in price results in a shortage or a surplus. 
A) determine if consumers will or will not buy a product. 
B) measure how responsive consumers are to a change in price. 
C) determine in what direction the demand curve shifts if income changes. 
D) find the market equilibrium. 
E) determine if a change in price results in a shortage or a surplus.

Question 10

When supply is perfectly inelastic,the supply curve is

Accepted Answer

A) upward sloping but not a straight line. 
B) vertical. 
C) downward sloping. 
D) horizontal. 
E) a straight line with a 45 degree slope that goes through the origin. 
A) upward sloping but not a straight line. 
B) vertical. 
C) downward sloping. 
D) horizontal. 
E) a straight line with a 45 degree slope that goes through the origin.

Question 11

-The figure above shows the supply curve for a good with

Accepted Answer

A) a perfectly elastic supply. 
B) a perfectly inelastic supply. 
C) an elastic supply. 
D) an inelastic supply. 
E) a unit elastic supply. 
A) a perfectly elastic supply. 
B) a perfectly inelastic supply. 
C) an elastic supply. 
D) an inelastic supply. 
E) a unit elastic supply.

Question 12

-Using the data in the table above,the demand for skirts is

Accepted Answer

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

Question 13

When the price of a textbook is $95,the quantity of textbooks supplied is 90 million a year and when the price rises to $105,the quantity of textbooks supplied is 110 million a year.The supply of textbooks is

Accepted Answer

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

Question 14

-June makes holiday wreaths and sells them during the holiday season.The figure above shows her supply curve of wreaths per week.Use the midpoint method in this problem.
a.Calculate the percentage change in quantity between points A and B.
b.Calculate the percentage change in price between points A and B.
c.Calculate the price elasticity of supply between points A and B.

Accepted Answer

a.The percentage change in qua

Question 15

What is the formula for the cross 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 quantity supplied. 
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 quantity supplied.

Question 16

The fact that there is a very limited amount of land in Hong Kong means the supply of new apartments in Hong Kong is

Accepted Answer

A) inelastic. 
B) elastic. 
C) unit elastic. 
D) perfectly elastic. 
E) limited by the demand. 
A) inelastic. 
B) elastic. 
C) unit elastic. 
D) perfectly elastic. 
E) limited by the demand.

Question 17

The income elasticity of demand is the percentage change in the ________ divided by the percentage change in ________.

Accepted Answer

A) quantity demanded;the price of a substitute or complement 
B) quantity supplied;price 
C) quantity demanded;price 
D) quantity demanded;income 
E) quantity demanded when income changes;the quantity supplied 
A) quantity demanded;the price of a substitute or complement 
B) quantity supplied;price 
C) quantity demanded;price 
D) quantity demanded;income 
E) quantity demanded when income changes;the quantity supplied

Question 18

It is very difficult for Gourmet Chocolatier to find inexpensive and available inputs for the business.Because of this,we predict that Gourmet Chocolatier's supply to be

Accepted Answer

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

Question 19

Suppose the price of a box of cereal rises from $4 to $6.Using the midpoint method,what is the percentage change in price?

Accepted Answer

A) 50 percent 
B) 40 percent 
C) 33 percent 
D) 67 percent 
E) None of the above answers is correct. 
A) 50 percent 
B) 40 percent 
C) 33 percent 
D) 67 percent 
E) None of the above answers is correct.

Question 20

Using the midpoint method,if the price of an airline ticket from Orlando to Pittsburgh falls from $275 to $238,the percentage change in price is

Accepted Answer

A) 1442 percent. 
B) 14.42 percent. 
C) 15.54 percent. 
D) 13.45 percent. 
E) 68.00 percent. 
A) 1442 percent. 
B) 14.42 percent. 
C) 15.54 percent. 
D) 13.45 percent. 
E) 68.00 percent.

Explain the total revenue test.

If the income elasticity of demand for a good is 2,then when income rises 10 percent,the quantity demanded

A 10 percent increase in income brings about a 15 percent decrease in the demand for a good.What is the income elasticity of demand and is the good a normal good or an inferior good?

If Microsoft wanted to prove to the Justice Department that its Windows software has many substitutes that personal computer owners can use,Microsoft hopes to find

How are the cross elasticity of demand and income elasticity of demand similar and how are they different from the price elasticity of demand?

What are the three cases for the price elasticity of demand? Briefly define each.

The price elasticity of demand is a measure of the extent to which the quantity demanded of a good changes when ________ and all other influences on buyers' plans remain the same.

What is the price elasticity of supply? List and briefly define three cases of the price elasticity of supply.

The elasticity of demand is used to

When supply is perfectly inelastic,the supply curve is

-The figure above shows the supply curve for a good with

-Using the data in the table above,the demand for skirts is

When the price of a textbook is $95,the quantity of textbooks supplied is 90 million a year and when the price rises to $105,the quantity of textbooks supplied is 110 million a year.The supply of textbooks is

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

The fact that there is a very limited amount of land in Hong Kong means the supply of new apartments in Hong Kong is

The income elasticity of demand is the percentage change in the divided by the percentage change in .

It is very difficult for Gourmet Chocolatier to find inexpensive and available inputs for the business.Because of this,we predict that Gourmet Chocolatier's supply to be

Suppose the price of a box of cereal rises from $4 to $6.Using the midpoint method,what is the percentage change in price?

Using the midpoint method,if the price of an airline ticket from Orlando to Pittsburgh falls from $275 to $238,the percentage change in price 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

Explain the total revenue test.

If the income elasticity of demand for a good is 2,then when income rises 10 percent,the quantity demanded

A 10 percent increase in income brings about a 15 percent decrease in the demand for a good.What is the income elasticity of demand and is the good a normal good or an inferior good?

If Microsoft wanted to prove to the Justice Department that its Windows software has many substitutes that personal computer owners can use,Microsoft hopes to find

How are the cross elasticity of demand and income elasticity of demand similar and how are they different from the price elasticity of demand?

What are the three cases for the price elasticity of demand? Briefly define each.

The price elasticity of demand is a measure of the extent to which the quantity demanded of a good changes when ________ and all other influences on buyers' plans remain the same.

What is the price elasticity of supply? List and briefly define three cases of the price elasticity of supply.

The elasticity of demand is used to

When supply is perfectly inelastic,the supply curve is

-The figure above shows the supply curve for a good with

-Using the data in the table above,the demand for skirts is

When the price of a textbook is $95,the quantity of textbooks supplied is 90 million a year and when the price rises to $105,the quantity of textbooks supplied is 110 million a year.The supply of textbooks is

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

The fact that there is a very limited amount of land in Hong Kong means the supply of new apartments in Hong Kong is

The income elasticity of demand is the percentage change in the ________ divided by the percentage change in ________.

It is very difficult for Gourmet Chocolatier to find inexpensive and available inputs for the business.Because of this,we predict that Gourmet Chocolatier's supply to be

Suppose the price of a box of cereal rises from $4 to $6.Using the midpoint method,what is the percentage change in price?

Using the midpoint method,if the price of an airline ticket from Orlando to Pittsburgh falls from $275 to $238,the percentage change in price 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

The income elasticity of demand is the percentage change in the divided by the percentage change in .