Question 1

The greater the amount of time that passes after a price change,the

Accepted Answer

A) less elastic supply becomes. 
B) more elastic supply becomes. 
C) more negative supply becomes. 
D) steeper the supply curve becomes. 
E) None of the above answers is correct. 
A) less elastic supply becomes. 
B) more elastic supply becomes. 
C) more negative supply becomes. 
D) steeper the supply curve becomes. 
E) None of the above answers is correct.

Question 2

Which of the following is true?
I.The easier it is to find substitutes for a good,the more price elastic the demand for the good is.
Ii.The demand for a good is more price elastic the smaller the proportion of income spent on it.
Iii.If demand is price elastic,lowering the price leads to a decrease in total revenue.

Accepted Answer

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

Question 3

When income increases from $20,000 to $30,000 the number of home delivered pizzas per year increases from 22 to 40.The income elasticity of demand for home delivered pizza equals

Accepted Answer

A) 1.45. 
B) 0.69. 
C) 0.58. 
D) 0.40. 
E) 2.86. 
A) 1.45. 
B) 0.69. 
C) 0.58. 
D) 0.40. 
E) 2.86.

Question 4

-The data in the table above give two points on the demand curve for pizza.Using the midpoint method,when the price of a pizza falls from $10 to $9,what is the percentage change in the quantity demanded?

Accepted Answer

A) 22.2 percent 
B) 10.0 percent 
C) 15.5 percent 
D) 5.2 percent 
E) 25 percent 
A) 22.2 percent 
B) 10.0 percent 
C) 15.5 percent 
D) 5.2 percent 
E) 25 percent

Question 5

The figure above shows the demand curve for Starbucks latte.
-In the figure above,the demand is unit elastic

Accepted Answer

A) at the point where the price is $3.00 per cup. 
B) at the point where the price is $2.00 per cup. 
C) at the point where the price is $4.00 per cup. 
D) at the point where the price is $2.50 per cup. 
E) at all points along the demand curve. 
A) at the point where the price is $3.00 per cup. 
B) at the point where the price is $2.00 per cup. 
C) at the point where the price is $4.00 per cup. 
D) at the point where the price is $2.50 per cup. 
E) at all points along the demand curve.

Question 6

Anna owns the Sweet Alps Chocolate store.She charges $10 per pound for her hand made chocolate.You,the economist,have calculated the elasticity of demand for chocolate in her town to be 2.5.If she wants to increase her total revenue,what advice will you give her?

Accepted Answer

You should tell her to lower h

Question 7

People eat at restaurants less often when their incomes fall because of a recession.Eating at restaurants must be

Accepted Answer

A) an inferior good. 
B) a normal good. 
C) a complement to other goods. 
D) a substitute for other goods. 
E) an inelastic good. 
A) an inferior good. 
B) a normal good. 
C) a complement to other goods. 
D) a substitute for other goods. 
E) an inelastic good.

Question 8

If demand is price inelastic and the price is lowered,which of the following occurs?

Accepted Answer

A) The quantity sold decreases. 
B) The total expenditure increases and the total revenue decreases. 
C) The total revenue of the firms selling the product is unchanged. 
D) The total revenue of the firms selling the product decreases. 
E) The total expenditure decreases and the total revenue increases. 
A) The quantity sold decreases. 
B) The total expenditure increases and the total revenue decreases. 
C) The total revenue of the firms selling the product is unchanged. 
D) The total revenue of the firms selling the product decreases. 
E) The total expenditure decreases and the total revenue increases.

Question 9

In the figure above,when the price rises from $3 to $4,the price elasticity of demand is

Accepted Answer

A) 1.4. 
B) 2. 
C) 0.71. 
D) 0.4. 
E) 1. 
A) 1.4. 
B) 2. 
C) 0.71. 
D) 0.4. 
E) 1.

Question 10

The cross elasticity of demand is a measure of how

Accepted Answer

A) responsive consumers are to changes in the price of a product. 
B) responsive suppliers are to changes in the price of a product. 
C) demand for a product changes when the price of a substitute or complement changes. 
D) total revenue changes when the price of a product changes. 
E) demand for a product changes when income changes. 
A) responsive consumers are to changes in the price of a product. 
B) responsive suppliers are to changes in the price of a product. 
C) demand for a product changes when the price of a substitute or complement changes. 
D) total revenue changes when the price of a product changes. 
E) demand for a product changes when income changes.

Question 11

The total revenue test says that if a price decrease leads to

Accepted Answer

A) an increase in total revenue,supply is elastic. 
B) a decrease in total revenue,supply is unit elastic. 
C) a decrease in total revenue,supply is inelastic. 
D) an increase in total revenue,supply is inelastic. 
E) None of the above answers is correct. 
A) an increase in total revenue,supply is elastic. 
B) a decrease in total revenue,supply is unit elastic. 
C) a decrease in total revenue,supply is inelastic. 
D) an increase in total revenue,supply is inelastic. 
E) None of the above answers is correct.

Question 12

Suppose the local university charges $85 per credit hour.If tuition increases from $85 to $93 per credit hour,using the midpoint method,what is the percentage change in price?

Accepted Answer

A) 8.99 percent 
B) 8.00 percent 
C) 9.41 percent 
D) 8.62 percent 
E) 9.12 percent 
A) 8.99 percent 
B) 8.00 percent 
C) 9.41 percent 
D) 8.62 percent 
E) 9.12 percent

Question 13

The price elasticity of supply is a measure of the extent to which the quantity supplied of a good changes when the

Accepted Answer

A) cost of producing the product increases. 
B) quantity of the good demanded increases. 
C) supply increases. 
D) price changes. 
E) number of firms supplying the good changes. 
A) cost of producing the product increases. 
B) quantity of the good demanded increases. 
C) supply increases. 
D) price changes. 
E) number of firms supplying the good changes.

Question 14

The price elasticity of supply is always a positive value because
I.there is a direct relationship between the price and the quantity supplied.
Ii.as the equilibrium price increases,the equilibrium quantity also always increases.
Iii.buyers are willing to pay a higher price for larger quantities.

Accepted Answer

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

Question 15

If the price elasticity of demand for a product is 2.5,then a price increase of 1.5 percent decreases the quantity demanded by

Accepted Answer

A) 1.55 percent. 
B) 3.50 percent. 
C) 5.00 percent. 
D) 3.75 percent. 
E) 1.00 percent. 
A) 1.55 percent. 
B) 3.50 percent. 
C) 5.00 percent. 
D) 3.75 percent. 
E) 1.00 percent.

Question 16

Which of the following statements is correct?

Accepted Answer

A) The demand for New Balance shoes is more elastic than the demand for shoes in general. 
B) The demand for salt is very elastic. 
C) The demand for luxuries is less elastic than the demand for necessities. 
D) The demand for a narrowly defined good is less elastic than the demand for a more broadly defined good. 
E) The larger the proportion of income spent on a good,the smaller the elasticity of demand. 
A) The demand for New Balance shoes is more elastic than the demand for shoes in general. 
B) The demand for salt is very elastic. 
C) The demand for luxuries is less elastic than the demand for necessities. 
D) The demand for a narrowly defined good is less elastic than the demand for a more broadly defined good. 
E) The larger the proportion of income spent on a good,the smaller the elasticity of demand.

Question 17

If the price of a one good increases and the quantity demanded of a different good decreases,then these two goods are

Accepted Answer

A) substitutes. 
B) normal goods. 
C) inferior goods. 
D) inelastic goods. 
E) complements. 
A) substitutes. 
B) normal goods. 
C) inferior goods. 
D) inelastic goods. 
E) complements.

Question 18

If a 4 percent change in the price of a good leads to a 3 percent change in quantity demanded,the price elasticity of demand equals

Accepted Answer

A) 1.33. 
B) 0.75. 
C) 4.00. 
D) 3.44. 
E) None of the above answers is correct. 
A) 1.33. 
B) 0.75. 
C) 4.00. 
D) 3.44. 
E) None of the above answers is correct.

Question 19

To determine the price elasticity of demand,we

Accepted Answer

A) need information on consumers' incomes. 
B) need to know how much is available. 
C) compare the percentage change in the quantity demanded to the percentage change in the price. 
D) compare the change in the quantity to the change in price. 
E) divide the quantity by the price. 
A) need information on consumers' incomes. 
B) need to know how much is available. 
C) compare the percentage change in the quantity demanded to the percentage change in the price. 
D) compare the change in the quantity to the change in price. 
E) divide the quantity by the price.

Question 20

-Steve sells hotdogs from a vending cart downtown.The table above shows his daily total revenues at four different prices.Between which two prices is the demand for hotdogs
a.elastic?
b.unit elastic?
c.inelastic?

Accepted Answer

a.Steve's demand is elastic between $1.5

The greater the amount of time that passes after a price change,the

When income increases from $20,000 to $30,000 the number of home delivered pizzas per year increases from 22 to 40.The income elasticity of demand for home delivered pizza equals

-The data in the table above give two points on the demand curve for pizza.Using the midpoint method,when the price of a pizza falls from $10 to $9,what is the percentage change in the quantity demanded?

The figure above shows the demand curve for Starbucks latte. -In the figure above,the demand is unit elastic

Anna owns the Sweet Alps Chocolate store.She charges $10 per pound for her hand made chocolate.You,the economist,have calculated the elasticity of demand for chocolate in her town to be 2.5.If she wants to increase her total revenue,what advice will you give her?

People eat at restaurants less often when their incomes fall because of a recession.Eating at restaurants must be

If demand is price inelastic and the price is lowered,which of the following occurs?

In the figure above,when the price rises from $3 to $4,the price elasticity of demand is

The cross elasticity of demand is a measure of how

The total revenue test says that if a price decrease leads to

Suppose the local university charges $85 per credit hour.If tuition increases from $85 to $93 per credit hour,using the midpoint method,what is the percentage change in price?

The price elasticity of supply is a measure of the extent to which the quantity supplied of a good changes when the

The price elasticity of supply is always a positive value because I.there is a direct relationship between the price and the quantity supplied. Ii.as the equilibrium price increases,the equilibrium quantity also always increases. Iii.buyers are willing to pay a higher price for larger quantities.

If the price elasticity of demand for a product is 2.5,then a price increase of 1.5 percent decreases the quantity demanded by

Which of the following statements is correct?

If the price of a one good increases and the quantity demanded of a different good decreases,then these two goods are

If a 4 percent change in the price of a good leads to a 3 percent change in quantity demanded,the price elasticity of demand equals

To determine the price elasticity of demand,we

-Steve sells hotdogs from a vending cart downtown.The table above shows his daily total revenues at four different prices.Between which two prices is the demand for hotdogs a.elastic? b.unit elastic? c.inelastic?

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

The greater the amount of time that passes after a price change,the

When income increases from $20,000 to $30,000 the number of home delivered pizzas per year increases from 22 to 40.The income elasticity of demand for home delivered pizza equals

-The data in the table above give two points on the demand curve for pizza.Using the midpoint method,when the price of a pizza falls from $10 to $9,what is the percentage change in the quantity demanded?

The figure above shows the demand curve for Starbucks latte. -In the figure above,the demand is unit elastic

Anna owns the Sweet Alps Chocolate store.She charges $10 per pound for her hand made chocolate.You,the economist,have calculated the elasticity of demand for chocolate in her town to be 2.5.If she wants to increase her total revenue,what advice will you give her?

People eat at restaurants less often when their incomes fall because of a recession.Eating at restaurants must be

If demand is price inelastic and the price is lowered,which of the following occurs?

In the figure above,when the price rises from $3 to $4,the price elasticity of demand is

The cross elasticity of demand is a measure of how

The total revenue test says that if a price decrease leads to

Suppose the local university charges $85 per credit hour.If tuition increases from $85 to $93 per credit hour,using the midpoint method,what is the percentage change in price?

The price elasticity of supply is a measure of the extent to which the quantity supplied of a good changes when the

The price elasticity of supply is always a positive value because I.there is a direct relationship between the price and the quantity supplied. Ii.as the equilibrium price increases,the equilibrium quantity also always increases. Iii.buyers are willing to pay a higher price for larger quantities.

If the price elasticity of demand for a product is 2.5,then a price increase of 1.5 percent decreases the quantity demanded by

Which of the following statements is correct?

If the price of a one good increases and the quantity demanded of a different good decreases,then these two goods are

If a 4 percent change in the price of a good leads to a 3 percent change in quantity demanded,the price elasticity of demand equals

To determine the price elasticity of demand,we

-Steve sells hotdogs from a vending cart downtown.The table above shows his daily total revenues at four different prices.Between which two prices is the demand for hotdogs a.elastic? b.unit elastic? c.inelastic?

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