Question 1

The opportunity cost of producing a good rises only slightly as the quantity produced increases.This good has

Accepted Answer

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

Question 2

-The demand curve shown in the figure above is ________ over the price range from $0.90 to $1.10 per pack.

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 3

A firm raises the price it charges.The firm's total revenue decreases.What can we conclude about the price elasticity of demand?

Accepted Answer

A) Demand is elastic. 
B) Demand is unit elastic. 
C) Demand is inelastic. 
D) Demand is perfectly inelastic. 
E) Not enough information is given to conclude anything about price elasticity of demand. 
A) Demand is elastic. 
B) Demand is unit elastic. 
C) Demand is inelastic. 
D) Demand is perfectly inelastic. 
E) Not enough information is given to conclude anything about price elasticity of demand.

Question 4

If,when the price falls,total revenue increases,demand is

Accepted Answer

A) elastic. 
B) inelastic. 
C) unit elastic. 
D) perfectly inelastic. 
E) None of the above answers is correct because total revenue always decreases when the price of the good falls. 
A) elastic. 
B) inelastic. 
C) unit elastic. 
D) perfectly inelastic. 
E) None of the above answers is correct because total revenue always decreases when the price of the good falls.

Question 5

If the cross elasticity of demand between car insurance and new cars is -0.41,then car insurance and new cars are

Accepted Answer

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

Question 6

-Using the table above,what is the elasticity of demand between the prices of $9 and $7?

Accepted Answer

A) 1/4 
B) 1 
C) 2 
D) 4 
E) 6 
A) 1/4 
B) 1 
C) 2 
D) 4 
E) 6

Question 7

The figure above shows the demand curve for Starbucks latte.
-In the figure above,the demand is elastic in the range of prices between

Accepted Answer

A) $3.50 and $4.50 per cup. 
B) $2.50 and $3.50 per cup. 
C) $1.00 and $2.00 per cup. 
D) $2.00 and $4.00 per cup. 
E) $1.75 and $2.75 per cup. 
A) $3.50 and $4.50 per cup. 
B) $2.50 and $3.50 per cup. 
C) $1.00 and $2.00 per cup. 
D) $2.00 and $4.00 per cup. 
E) $1.75 and $2.75 per cup.

Question 8

The longer the time that has elapsed since the price of a good changed,the

Accepted Answer

A) more elastic the demand for that good. 
B) steeper the demand curve. 
C) less elastic the demand for that good. 
D) smaller the amount of that good bought. 
E) fewer substitutes available for the good. 
A) more elastic the demand for that good. 
B) steeper the demand curve. 
C) less elastic the demand for that good. 
D) smaller the amount of that good bought. 
E) fewer substitutes available for the good.

Question 9

If the demand for insulin is inelastic,an increase in insulin prices leads to

Accepted Answer

A) less total revenue for insulin makers. 
B) more total revenue for insulin makers. 
C) no change in total revenue for insulin makers. 
D) first a decrease,then an increase in total revenue for insulin makers. 
E) Total revenue probably changes,but we need more information about the change in total expenditures on insulin to determine if the total revenue rises,falls,or stays the same. 
A) less total revenue for insulin makers. 
B) more total revenue for insulin makers. 
C) no change in total revenue for insulin makers. 
D) first a decrease,then an increase in total revenue for insulin makers. 
E) Total revenue probably changes,but we need more information about the change in total expenditures on insulin to determine if the total revenue rises,falls,or stays the same.

Question 10

Is supply more elastic or less elastic as more time passes after a price change? Explain your answer.

Accepted Answer

Supply becomes elastic as more time pass

Question 11

When the percentage change in the quantity demanded exceeds the percentage change in price,then demand is

Accepted Answer

A) inelastic. 
B) unit elastic. 
C) elastic. 
D) irrelevant. 
E) undefined. 
A) inelastic. 
B) unit elastic. 
C) elastic. 
D) irrelevant. 
E) undefined.

Question 12

Suppose the Oakland Raiders football team increases their season ticket prices and total revenue from ticket sales falls,but not to zero.This fact means that the demand for Raiders tickets is

Accepted Answer

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

Question 13

Demand is price inelastic if ________ percentage change in the price leads to a ________ percentage change in the quantity demanded.

Accepted Answer

A) a small;large 
B) a large;small 
C) any;large 
D) Both answers A and B are correct. 
E) None of the above answers is correct. 
A) a small;large 
B) a large;small 
C) any;large 
D) Both answers A and B are correct. 
E) None of the above answers is correct.

Question 14

-The table above gives the demand schedule for museum visits.
a.You,as the resident economist,have been given the task of maximizing the museum's total revenue.What admission price should you charge?
b.What is the elasticity of demand between $6 and $4?
c.Moving along the demand schedule from $10 to $8 to $6 and ultimately to $4,how does the price elasticity of demand change in size?

Accepted Answer

a.The admission price you should charge

Question 15

Consider two goods: peanut butter and jelly.If the price of jelly increases from $2 a jar to $3 per jar and the quantity demanded of peanut butter decreases from 50 jars to 45 jars,what is the cross elasticity of demand? Are the goods substitutes or complements?

Accepted Answer

The cross elasticity

Question 16

When income increases by 6 percent,the demand for potatoes decreases by 2 percent.The income elasticity of demand for potatoes equals

Accepted Answer

A) -2.00. 
B) 3.00. 
C) -3.00. 
D) 0.33. 
E) -0.33. 
A) -2.00. 
B) 3.00. 
C) -3.00. 
D) 0.33. 
E) -0.33.

Question 17

-The demand curve shown in the figure above reflects demand that is

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 18

If a 1 percent increase in the price of X increases the quantity demanded of Y by 2 percent,then X and Y are

Accepted Answer

A) complements and the cross elasticity of demand equals 2. 
B) substitutes and the cross elasticity of demand equals 1/2. 
C) substitutes and the cross elasticity of demand equals 2. 
D) complements and the income elasticity of demand equals 2. 
E) normal goods and the income elasticity of demand of each equals 2. 
A) complements and the cross elasticity of demand equals 2. 
B) substitutes and the cross elasticity of demand equals 1/2. 
C) substitutes and the cross elasticity of demand equals 2. 
D) complements and the income elasticity of demand equals 2. 
E) normal goods and the income elasticity of demand of each equals 2.

Question 19

-In the mid-1970s,Newsweek magazine reported that the city of Atlanta lowered its city bus fares from 40 cents to 15 cents a passenger.The number of bus riders increased by 15 percent after the fare cut.This set of results indicates that the demand for bus rides in Atlanta at that time was

Accepted Answer

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

Question 20

Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds.Using the midpoint method,what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?

Accepted Answer

The price elasticity of demand is 0.23.(

The opportunity cost of producing a good rises only slightly as the quantity produced increases.This good has

-The demand curve shown in the figure above is ________ over the price range from $0.90 to $1.10 per pack.

A firm raises the price it charges.The firm's total revenue decreases.What can we conclude about the price elasticity of demand?

If,when the price falls,total revenue increases,demand is

If the cross elasticity of demand between car insurance and new cars is -0.41,then car insurance and new cars are

-Using the table above,what is the elasticity of demand between the prices of $9 and $7?

The figure above shows the demand curve for Starbucks latte. -In the figure above,the demand is elastic in the range of prices between

The longer the time that has elapsed since the price of a good changed,the

If the demand for insulin is inelastic,an increase in insulin prices leads to

Is supply more elastic or less elastic as more time passes after a price change? Explain your answer.

When the percentage change in the quantity demanded exceeds the percentage change in price,then demand is

Suppose the Oakland Raiders football team increases their season ticket prices and total revenue from ticket sales falls,but not to zero.This fact means that the demand for Raiders tickets is

Demand is price inelastic if percentage change in the price leads to a percentage change in the quantity demanded.

Consider two goods: peanut butter and jelly.If the price of jelly increases from $2 a jar to $3 per jar and the quantity demanded of peanut butter decreases from 50 jars to 45 jars,what is the cross elasticity of demand? Are the goods substitutes or complements?

When income increases by 6 percent,the demand for potatoes decreases by 2 percent.The income elasticity of demand for potatoes equals

-The demand curve shown in the figure above reflects demand that is

If a 1 percent increase in the price of X increases the quantity demanded of Y by 2 percent,then X and Y are

-In the mid-1970s,Newsweek magazine reported that the city of Atlanta lowered its city bus fares from 40 cents to 15 cents a passenger.The number of bus riders increased by 15 percent after the fare cut.This set of results indicates that the demand for bus rides in Atlanta at that time was

Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds.Using the midpoint method,what is the price elasticity of demand for flour? Is the demand for flour elastic or 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 opportunity cost of producing a good rises only slightly as the quantity produced increases.This good has

-The demand curve shown in the figure above is ________ over the price range from $0.90 to $1.10 per pack.

A firm raises the price it charges.The firm's total revenue decreases.What can we conclude about the price elasticity of demand?

If,when the price falls,total revenue increases,demand is

If the cross elasticity of demand between car insurance and new cars is -0.41,then car insurance and new cars are

-Using the table above,what is the elasticity of demand between the prices of $9 and $7?

The figure above shows the demand curve for Starbucks latte. -In the figure above,the demand is elastic in the range of prices between

The longer the time that has elapsed since the price of a good changed,the

If the demand for insulin is inelastic,an increase in insulin prices leads to

Is supply more elastic or less elastic as more time passes after a price change? Explain your answer.

When the percentage change in the quantity demanded exceeds the percentage change in price,then demand is

Suppose the Oakland Raiders football team increases their season ticket prices and total revenue from ticket sales falls,but not to zero.This fact means that the demand for Raiders tickets is

Demand is price inelastic if ________ percentage change in the price leads to a ________ percentage change in the quantity demanded.

Consider two goods: peanut butter and jelly.If the price of jelly increases from $2 a jar to $3 per jar and the quantity demanded of peanut butter decreases from 50 jars to 45 jars,what is the cross elasticity of demand? Are the goods substitutes or complements?

When income increases by 6 percent,the demand for potatoes decreases by 2 percent.The income elasticity of demand for potatoes equals

-The demand curve shown in the figure above reflects demand that is

If a 1 percent increase in the price of X increases the quantity demanded of Y by 2 percent,then X and Y are

-In the mid-1970s,Newsweek magazine reported that the city of Atlanta lowered its city bus fares from 40 cents to 15 cents a passenger.The number of bus riders increased by 15 percent after the fare cut.This set of results indicates that the demand for bus rides in Atlanta at that time was

Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds.Using the midpoint method,what is the price elasticity of demand for flour? Is the demand for flour elastic or 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

Demand is price inelastic if percentage change in the price leads to a percentage change in the quantity demanded.