Question 1

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 2

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 3

-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 4

If the quantity supplied increases by 8 percent when the price rises by 2 percent,the price elasticity of supply is ________ .

Accepted Answer

A)  10.0 
B)  6.0 
C)  0.25 
D)  16.0 
E)  4.0 
A)  10.0 
B)  6.0 
C)  0.25 
D)  16.0 
E)  4.0

Question 5

What is measured by the price elasticity of supply?

Accepted Answer

A)  The price elasticity of supply measures how responsive producers are to changes in the price of other goods. 
B)  The price elasticity of supply measures how responsive producers are to changes in income. 
C)  The price elasticity of supply measures how responsive producers are to changes in the price of a product. 
D)  The price elasticity of supply is a measure of the slope of the supply curve. 
E)  The price elasticity of supply measures how responsive producers are to changes in the cost of producing a product. 
A)  The price elasticity of supply measures how responsive producers are to changes in the price of other goods. 
B)  The price elasticity of supply measures how responsive producers are to changes in income. 
C)  The price elasticity of supply measures how responsive producers are to changes in the price of a product. 
D)  The price elasticity of supply is a measure of the slope of the supply curve. 
E)  The price elasticity of supply measures how responsive producers are to changes in the cost of producing a product.

Question 6

If the price elasticity of supply for a good is 0.75,then

Accepted Answer

A)  the percentage change in the quantity supplied is less than the percentage change in price. 
B)  the supply is elastic. 
C)  an increase in the price boosts the quantity supplied by a larger percentage. 
D)  the supply is inelastic so the demand must also be inelastic. 
E)  None of the above answers is correct. 
A)  the percentage change in the quantity supplied is less than the percentage change in price. 
B)  the supply is elastic. 
C)  an increase in the price boosts the quantity supplied by a larger percentage. 
D)  the supply is inelastic so the demand must also be inelastic. 
E)  None of the above answers is correct.

Question 7

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

Accepted Answer

A)  movies 
B)  airline travel 
C)  foreign travel 
D)  food 
E)  restaurant meals 
A)  movies 
B)  airline travel 
C)  foreign travel 
D)  food 
E)  restaurant meals

Question 8

-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 9

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 10

If the price of a a good increases by 10 percent and the quantity supplied increases by 5 percent,then the elasticity of supply is

Accepted Answer

A)  greater than one and supply is elastic. 
B)  negative and supply is inelastic. 
C)  less than one and supply is elastic. 
D)  less than one and supply is inelastic. 
E)  greater than one and supply is inelastic. 
A)  greater than one and supply is elastic. 
B)  negative and supply is inelastic. 
C)  less than one and supply is elastic. 
D)  less than one and supply is inelastic. 
E)  greater than one and supply is inelastic.

Question 11

-Using the data in the table above,when the price of a skirt rises from $20 to $35,what is the price elasticity of demand? (Use the midpoint method.)

Accepted Answer

A)  0.33 
B)  0.25 
C)  1.00 
D)  1.33 
E)  3.00 
A)  0.33 
B)  0.25 
C)  1.00 
D)  1.33 
E)  3.00

Question 12

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 13

-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 14

If the price elasticity of demand for opera tickets in Orlando is 1.00,then the demand for opera tickets in Orlando is

Accepted Answer

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

Question 15

The figure above shows the supply curve for roses.
-Suppose a decrease in supply raises the price from $4.00 to $5.50 and decreases the quantity demanded from 2,000 to 1,500.Using the midpoint method,the elasticity of demand equals

Accepted Answer

A)  2.10. 
B)  1.11. 
C)  0.90. 
D)  0.72. 
E)  None of the above answers is correct. 
A)  2.10. 
B)  1.11. 
C)  0.90. 
D)  0.72. 
E)  None of the above answers is correct.

Question 16

If the cross elasticity of demand is negative,that means the goods

Accepted Answer

A)  have elastic demands. 
B)  have inelastic demands. 
C)  are complements. 
D)  are substitutes. 
E)  are inferior. 
A)  have elastic demands. 
B)  have inelastic demands. 
C)  are complements. 
D)  are substitutes. 
E)  are inferior.

Question 17

If a firm supplies 200 units at a price of $50 and 100 units at a price of $40,using the midpoint method,what is the price elasticity of supply?

Accepted Answer

A)  0.33 
B)  1.00 
C)  3.00 
D)  5.00 
E)  8.50 
A)  0.33 
B)  1.00 
C)  3.00 
D)  5.00 
E)  8.50

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

We calculate the price elasticity of demand as the

Accepted Answer

A)  ratio of the percentage change in the quantity demanded to the percentage change in price. 
B)  change in quantity divided by the change in price. 
C)  ratio of the percentage change in the price to the percentage change in quantity. 
D)  percentage change in the quantity demanded divided by the percentage change in income. 
E)  equilibrium quantity divided by the equilibrium price. 
A)  ratio of the percentage change in the quantity demanded to the percentage change in price. 
B)  change in quantity divided by the change in price. 
C)  ratio of the percentage change in the price to the percentage change in quantity. 
D)  percentage change in the quantity demanded divided by the percentage change in income. 
E)  equilibrium quantity divided by the equilibrium price.

Question 20

Suppose the price of a ticket to a Lenny Kravitz concert is $41 and at that price,the quantity of tickets demanded is 17,000 per concert.Using the midpoint method of calculating percentage changes,if Mr.Kravitz raises the price to $48 and the quantity demanded decreases to 16,000,the price elasticity of demand for his concert tickets is

Accepted Answer

A)  15.73. 
B)  6.06. 
C)  1.00. 
D)  0.39. 
E)  0.93. 
A)  15.73. 
B)  6.06. 
C)  1.00. 
D)  0.39. 
E)  0.93.

The price elasticity of demand measures which of the following?

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

If the quantity supplied increases by 8 percent when the price rises by 2 percent,the price elasticity of supply is ________ .

What is measured by the price elasticity of supply?

If the price elasticity of supply for a good is 0.75,then

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

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

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

If the price of a a good increases by 10 percent and the quantity supplied increases by 5 percent,then the elasticity of supply is

-Using the data in the table above,when the price of a skirt rises from $20 to $35,what is the price elasticity of demand? (Use the midpoint method.)

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

If the price elasticity of demand for opera tickets in Orlando is 1.00,then the demand for opera tickets in Orlando is

The figure above shows the supply curve for roses. -Suppose a decrease in supply raises the price from $4.00 to $5.50 and decreases the quantity demanded from 2,000 to 1,500.Using the midpoint method,the elasticity of demand equals

If the cross elasticity of demand is negative,that means the goods

If a firm supplies 200 units at a price of $50 and 100 units at a price of $40,using the midpoint method,what is the price elasticity of supply?

-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?

We calculate the price elasticity of demand as the

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The U.S.and Global Economies

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Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

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Global Markets in Action

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Exam 5: Elasticities of Demand and Supply

The price elasticity of demand measures which of the following?

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

If the quantity supplied increases by 8 percent when the price rises by 2 percent,the price elasticity of supply is ________ .

What is measured by the price elasticity of supply?

If the price elasticity of supply for a good is 0.75,then

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

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

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

If the price of a a good increases by 10 percent and the quantity supplied increases by 5 percent,then the elasticity of supply is

-Using the data in the table above,when the price of a skirt rises from $20 to $35,what is the price elasticity of demand? (Use the midpoint method.)

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

If the price elasticity of demand for opera tickets in Orlando is 1.00,then the demand for opera tickets in Orlando is

The figure above shows the supply curve for roses. -Suppose a decrease in supply raises the price from $4.00 to $5.50 and decreases the quantity demanded from 2,000 to 1,500.Using the midpoint method,the elasticity of demand equals

If the cross elasticity of demand is negative,that means the goods

If a firm supplies 200 units at a price of $50 and 100 units at a price of $40,using the midpoint method,what is the price elasticity of supply?

-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?

We calculate the price elasticity of demand as the

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters