Question 1

The price elasticity of demand measures the extent to which the quantity demanded changes when

Accepted Answer

A)  the price of the good changes. 
B)  the price of a related good changes. 
C)  the expected future price of a good changes. 
D)  consumer preferences change. 
E)  both the demand and supply of the good change. 
A)  the price of the good changes. 
B)  the price of a related good changes. 
C)  the expected future price of a good changes. 
D)  consumer preferences change. 
E)  both the demand and supply of the good change.

Question 2

The measure used to determine whether two products are complements or substitutes is called the

Accepted Answer

A)  price elasticity of supply. 
B)  cross elasticity of demand. 
C)  price elasticity of demand. 
D)  income elasticity. 
E)  substitute elasticity of demand. 
A)  price elasticity of supply. 
B)  cross elasticity of demand. 
C)  price elasticity of demand. 
D)  income elasticity. 
E)  substitute elasticity of demand.

Question 3

"The fewer the number of substitutes for a product,the more elastic the demand for that product." Is the previous statement true or false?

Accepted Answer

The statement is false.The greater the n

Question 4

If a good is inferior,then it has an income elasticity of demand that is

Accepted Answer

A)  equal to zero. 
B)  greater than zero. 
C)  less than zero. 
D)  greater than one. 
E)  undefined. 
A)  equal to zero. 
B)  greater than zero. 
C)  less than zero. 
D)  greater than one. 
E)  undefined.

Question 5

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 6

Which of the following is true?
i.The supply of a good is inelastic if when its price changes,the percentage change in the quantity supplied exceeds the percentage change in price.
ii.Price elasticity of supply equals the percentage change in the quantity supplied divided by the percentage change in price.
iii.If demand is price elastic,a rise in price leads to a decrease in total revenue.

Accepted Answer

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

Question 7

What is the formula for the price 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 price. 
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 price.

Question 8

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 9

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 10

If a 5 percent decrease in income leads to a 15 percent decrease in the demand for a good,the income elasticity of demand equals

Accepted Answer

A)  -1/3 and the good is an inferior good. 
B)  1/3 and demand for the good is income elastic. 
C)  3 and the good is a normal good. 
D)  -3 and the demand for the good is income inelastic. 
E)  3 and the good is an inferior good. 
A)  -1/3 and the good is an inferior good. 
B)  1/3 and demand for the good is income elastic. 
C)  3 and the good is a normal good. 
D)  -3 and the demand for the good is income inelastic. 
E)  3 and the good is an inferior good.

Question 11

If the price elasticity of demand for a good is 2,then a 10 percent increase in the price of that good ________ the quantity demanded by ________ percent.

Accepted Answer

A)  increases; 20 
B)  decreases; 2 
C)  decreases; 10 
D)  decreases; 20 
E)  increases; 8 
A)  increases; 20 
B)  decreases; 2 
C)  decreases; 10 
D)  decreases; 20 
E)  increases; 8

Question 12

Moving downward along a linear (straight-line)downward sloping demand curve,the

Accepted Answer

A)  slope is constant. 
B)  price is constant. 
C)  quantity is constant. 
D)  elasticity is constant. 
E)  None of the above answers is correct. 
A)  slope is constant. 
B)  price is constant. 
C)  quantity is constant. 
D)  elasticity is constant. 
E)  None of the above answers is correct.

Question 13

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 14

If the supply of a good decreases and it causes total revenue to increase,this shows that the good has an

Accepted Answer

A)  inelastic demand 
B)  elastic demand 
C)  unit elastic demand 
D)  inelastic supply 
E)  elastic supply 
A)  inelastic demand 
B)  elastic demand 
C)  unit elastic demand 
D)  inelastic supply 
E)  elastic supply

Question 15

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 16

The total revenue test says
i.Demand is elastic if a decrease in price results in an increase in total revenue.
ii.Total revenue is maximized when demand is elastic.
iii.Total revenue is minimized when demand is unit elastic.

Accepted Answer

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

Question 17

The price elasticity of demand measures the ________ that results from a ________.

Accepted Answer

A)  change in quantity demanded; change in price 
B)  change in price; change in the quantity demanded 
C)  percentage change in price; percentage change in the quantity demanded 
D)  percentage change in the quantity demanded; percentage change in price 
E)  percentage change in the quantity demanded; change in price 
A)  change in quantity demanded; change in price 
B)  change in price; change in the quantity demanded 
C)  percentage change in price; percentage change in the quantity demanded 
D)  percentage change in the quantity demanded; percentage change in price 
E)  percentage change in the quantity demanded; change in price

Question 18

A 10 percent increase in price leads to a 20 percent decrease in the quantity demanded.The price elasticity of demand is equal to

Accepted Answer

A)  0.5. 
B)  1.0. 
C)  2.0. 
D)  20.0. 
E)  10.0. 
A)  0.5. 
B)  1.0. 
C)  2.0. 
D)  20.0. 
E)  10.0.

Question 19

What does a horizontal demand curve indicate about the price elasticity of demand?

Accepted Answer

If the demand curve for a good

Question 20

The long-run price elasticity of demand for electricity is ________ the short-run price elasticity of demand for electricity.

Accepted Answer

A)  greater than 
B)  less than 
C)  equal to 
D)  not comparable to 
E)  unrelated to 
A)  greater than 
B)  less than 
C)  equal to 
D)  not comparable to 
E)  unrelated to

The price elasticity of demand measures the extent to which the quantity demanded changes when

The measure used to determine whether two products are complements or substitutes is called the

"The fewer the number of substitutes for a product,the more elastic the demand for that product." Is the previous statement true or false?

If a good is inferior,then it has an income elasticity of demand that is

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

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

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

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

If a 5 percent decrease in income leads to a 15 percent decrease in the demand for a good,the income elasticity of demand equals

If the price elasticity of demand for a good is 2,then a 10 percent increase in the price of that good the quantity demanded by percent.

Moving downward along a linear (straight-line)downward sloping demand curve,the

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

If the supply of a good decreases and it causes total revenue to increase,this shows that the good has an

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

The total revenue test says i.Demand is elastic if a decrease in price results in an increase in total revenue. ii.Total revenue is maximized when demand is elastic. iii.Total revenue is minimized when demand is unit elastic.

The price elasticity of demand measures the that results from a .

A 10 percent increase in price leads to a 20 percent decrease in the quantity demanded.The price elasticity of demand is equal to

What does a horizontal demand curve indicate about the price elasticity of demand?

The long-run price elasticity of demand for electricity is ________ the short-run price elasticity of demand for electricity.

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

Exam 5: Elasticities of Demand and Supply

The price elasticity of demand measures the extent to which the quantity demanded changes when

The measure used to determine whether two products are complements or substitutes is called the

"The fewer the number of substitutes for a product,the more elastic the demand for that product." Is the previous statement true or false?

If a good is inferior,then it has an income elasticity of demand that is

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

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

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

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

If a 5 percent decrease in income leads to a 15 percent decrease in the demand for a good,the income elasticity of demand equals

If the price elasticity of demand for a good is 2,then a 10 percent increase in the price of that good ________ the quantity demanded by ________ percent.

Moving downward along a linear (straight-line)downward sloping demand curve,the

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

If the supply of a good decreases and it causes total revenue to increase,this shows that the good has an

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

The total revenue test says i.Demand is elastic if a decrease in price results in an increase in total revenue. ii.Total revenue is maximized when demand is elastic. iii.Total revenue is minimized when demand is unit elastic.

The price elasticity of demand measures the ________ that results from a ________.

A 10 percent increase in price leads to a 20 percent decrease in the quantity demanded.The price elasticity of demand is equal to

What does a horizontal demand curve indicate about the price elasticity of demand?

The long-run price elasticity of demand for electricity is ________ the short-run price elasticity of demand for electricity.

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

If the price elasticity of demand for a good is 2,then a 10 percent increase in the price of that good the quantity demanded by percent.

The price elasticity of demand measures the that results from a .