Question 1

When marginal revenue is zero,

Accepted Answer

A) P < MR. 
B) P = MR. 
C) a small increase in price causes no change in total revenue. 
D) a small decrease in price causes no change in total revenue. 
E) both c and d 
A) P < MR. 
B) P = MR. 
C) a small increase in price causes no change in total revenue. 
D) a small decrease in price causes no change in total revenue. 
E) both c and d

Question 2

In the figure above,what is the point price elasticity of demand when price is $40?

Accepted Answer

A) -0.50 
B) -0.75 
C) -1.00 
D) -1.50 
E) -2.00 
A) -0.50 
B) -0.75 
C) -1.00 
D) -1.50 
E) -2.00

Question 3

Use the figure below to calculate the cross-price elasticity of demand for good X when the price of good Y increases from $12 to $14:

Accepted Answer

A) 0.64 
B) 0.42 
C) 0.20 
D) 2.00 
E) 15.38
  
A) 0.64 
B) 0.42 
C) 0.20 
D) 2.00 
E) 15.38

Question 4

In the figure above,what is the interval elasticity of demand over the price range $60 to $80?

Accepted Answer

A) -0.75 
B) -1.10 
C) -1.00 
D) -1.40 
E) -2.00 
A) -0.75 
B) -1.10 
C) -1.00 
D) -1.40 
E) -2.00

Question 5

To answer the question,refer to the following table showing a demand schedule:   If price falls from $150 to $100,what is the elasticity of demand over this range?

Accepted Answer

A) -0.625 
B) -1.0 
C) -1.17 
D) -2.5 
E) -3.0 
A) -0.625 
B) -1.0 
C) -1.17 
D) -2.5 
E) -3.0

Question 6

If E1 is the demand elasticity for a product after a price change has been in effect one day,E2 is the demand elasticity for that product after one week,and E3 is demand elasticity for that product after one month,

Accepted Answer

A) |E1| > |E2| > |E3| 
B) |E2| > |E3| > |E1| 
C) |E3| > |E1| > |E2| 
D) |E3|> |E2| > |E1| 
A) |E1| > |E2| > |E3| 
B) |E2| > |E3| > |E1| 
C) |E3| > |E1| > |E2| 
D) |E3|> |E2| > |E1|

Question 7

Refer to the following figure.When price is $15 and quantity demanded is 1,000,what is the point elasticity of demand?

Accepted Answer

A) -3 
B) -1/3 
C) -1 
D) -5 
E) -2/3 
A) -3 
B) -1/3 
C) -1 
D) -5 
E) -2/3

Question 8

To answer the question,refer to the following table showing a demand schedule:   If price falls from $200 to $150,

Accepted Answer

A) arrows representing the price and quantity effects both point down. 
B) an arrow representing the price effect points down and is longer than an arrow for the quantity effect. 
C) an arrow representing the quantity effect points up and is shorter than an arrow for the price effect. 
D) arrows representing the price and quantity effects both point up. 
E) total revenue moves in the same direction as the arrow representing the quantity effect. 
A) arrows representing the price and quantity effects both point down. 
B) an arrow representing the price effect points down and is longer than an arrow for the quantity effect. 
C) an arrow representing the quantity effect points up and is shorter than an arrow for the price effect. 
D) arrows representing the price and quantity effects both point up. 
E) total revenue moves in the same direction as the arrow representing the quantity effect.

Question 9

If a drought increases the price of corn by 10% and decreases the quantity of corn demanded by 5%,then demand for corn is

Accepted Answer

A) elastic and total revenue to corn farmers will decrease. 
B) inelastic and total revenue to corn farmers will decrease. 
C) elastic and total revenue to corn farmers will increase. 
D) inelastic and total revenue to corn farmers will increase. 
A) elastic and total revenue to corn farmers will decrease. 
B) inelastic and total revenue to corn farmers will decrease. 
C) elastic and total revenue to corn farmers will increase. 
D) inelastic and total revenue to corn farmers will increase.

Question 10

In the figure above,if price DECREASES from $80 to $60,an arrow representing the QUANTITY effect

Accepted Answer

A) will point upward. 
B) will point downward. 
C) will be shorter than and in the opposite direction of)the arrow representing the price effect. 
D) will be shorter than and in the same direction of)the arrow representing the price effect. 
E) will point in the opposite direction in which total revenue will move. 
A) will point upward. 
B) will point downward. 
C) will be shorter than and in the opposite direction of)the arrow representing the price effect. 
D) will be shorter than and in the same direction of)the arrow representing the price effect. 
E) will point in the opposite direction in which total revenue will move.

Question 11

Refer to the following figure.What is the equation for marginal revenue?

Accepted Answer

A) MR = 4,000- 0.005P 
B) MR = 4,000-200Q 
C) MR = 4,000 -200P 
D) MR = 20 -0.01Q 
E) MR = 20 -200Q 
A) MR = 4,000- 0.005P 
B) MR = 4,000-200Q 
C) MR = 4,000 -200P 
D) MR = 20 -0.01Q 
E) MR = 20 -200Q

Question 12

In the figure above,what is the point price elasticity of demand when price is $60?

Accepted Answer

A) -0.50 
B) -0.75 
C) -1.00 
D) -1.60 
E) -2.00 
A) -0.50 
B) -0.75 
C) -1.00 
D) -1.60 
E) -2.00

Question 13

the figure below,which shows a linear demand curve and the associated total revenue curve,to answer the question.   The maximum possible total revenue is $_________.

Accepted Answer

A) 10,500 
B) 11,000 
C) 11,500 
D) 12,000 
E) 12,500 
A) 10,500 
B) 11,000 
C) 11,500 
D) 12,000 
E) 12,500

Question 14

The fact that the cross-price elasticity of natural gas with respect to the price of fuel oil is 0.4 implies that

Accepted Answer

A) natural gas and fuel oil are substitutes. 
B) natural gas is a normal good. 
C) the quantity of natural gas demanded will decrease by 1.6% when the price of fuel oil decreases by 4%. 
D) both a and c 
A) natural gas and fuel oil are substitutes. 
B) natural gas is a normal good. 
C) the quantity of natural gas demanded will decrease by 1.6% when the price of fuel oil decreases by 4%. 
D) both a and c

Question 15

Demand is more elastic / less elastic)in the short run than in the long run

Accepted Answer

A) more elastic)because goods account for a larger percentage of the consumer's budget in the short run than in the long run. 
B) less elastic)because goods account for a smaller percentage of the consumer's budget in the short run than in the long run. 
C) more elastic)because consumers have less time to adapt to a price change in the short run than in the long run. 
D) less elastic)because consumers have less time to adapt to a price change in the short run than in the long run. 
A) more elastic)because goods account for a larger percentage of the consumer's budget in the short run than in the long run. 
B) less elastic)because goods account for a smaller percentage of the consumer's budget in the short run than in the long run. 
C) more elastic)because consumers have less time to adapt to a price change in the short run than in the long run. 
D) less elastic)because consumers have less time to adapt to a price change in the short run than in the long run.

Question 16

Refer to the following graph to answer the question:   Suppose price rises from $90 to $110.Total revenue moves in the ________ same,opposite)direction as the dominant effect.In this case,total revenue ____________ increases,decreases,stays the same)because the quantity effect is _________ larger than,smaller than,the same as)the price effect.

Accepted Answer

A) same; increases; larger than 
B) same; decreases; smaller than 
C) same; decreases; larger than 
D) opposite; increases; larger than 
E) opposite; decreases; smaller than 
A) same; increases; larger than 
B) same; decreases; smaller than 
C) same; decreases; larger than 
D) opposite; increases; larger than 
E) opposite; decreases; smaller than

Question 17

Refer to the following figure.At a price of $10,the point elasticity of demand for D3 is ________ and marginal revenue is _______.

Accepted Answer

A) -5; positive 
B) -0.5; negative 
C) -0.2; negative 
D) -1; zero 
A) -5; positive 
B) -0.5; negative 
C) -0.2; negative 
D) -1; zero

Question 18

If the quantity of gidgets demanded increases when the price of gadgets decreases

Accepted Answer

A) gidgets and gadgets are substitutes. 
B) gidgets and gadgets are complements. 
C) gidgets are normal goods,while gadgets are inferior goods. 
D) gadgets are normal goods,while gidgets are inferior goods. 
A) gidgets and gadgets are substitutes. 
B) gidgets and gadgets are complements. 
C) gidgets are normal goods,while gadgets are inferior goods. 
D) gadgets are normal goods,while gidgets are inferior goods.

Question 19

To answer the question,refer to the following table showing a demand schedule:   As output increases from 1,000 to 1,400 what is marginal revenue?

Accepted Answer

A) $25 
B) $50 
C) -$400 
D) -$25 
E) -75 
A) $25 
B) $50 
C) -$400 
D) -$25 
E) -75

Question 20

Use the figure to calculate the income elasticity of demand when income increases from $25,000 to $30,000:

Accepted Answer

A) -1.0 
B) -0.1818 
C) 0.1818 
D) -1.5 
E) 1.2 
A) -1.0 
B) -0.1818 
C) 0.1818 
D) -1.5 
E) 1.2

When marginal revenue is zero,

In the figure above,what is the point price elasticity of demand when price is $40?

Use the figure below to calculate the cross-price elasticity of demand for good X when the price of good Y increases from $12 to $14:

In the figure above,what is the interval elasticity of demand over the price range $60 to $80?

To answer the question,refer to the following table showing a demand schedule: If price falls from $150 to $100,what is the elasticity of demand over this range?

If E₁ is the demand elasticity for a product after a price change has been in effect one day,E₂ is the demand elasticity for that product after one week,and E₃ is demand elasticity for that product after one month,

Refer to the following figure.When price is $15 and quantity demanded is 1,000,what is the point elasticity of demand?

To answer the question,refer to the following table showing a demand schedule: If price falls from $200 to $150,

If a drought increases the price of corn by 10% and decreases the quantity of corn demanded by 5%,then demand for corn is

In the figure above,if price DECREASES from $80 to $60,an arrow representing the QUANTITY effect

Refer to the following figure.What is the equation for marginal revenue?

In the figure above,what is the point price elasticity of demand when price is $60?

the figure below,which shows a linear demand curve and the associated total revenue curve,to answer the question. The maximum possible total revenue is $_________.

The fact that the cross-price elasticity of natural gas with respect to the price of fuel oil is 0.4 implies that

Demand is more elastic / less elastic)in the short run than in the long run

Refer to the following figure.At a price of $10,the point elasticity of demand for D₃ is __ and marginal revenue is _.

If the quantity of gidgets demanded increases when the price of gadgets decreases

To answer the question,refer to the following table showing a demand schedule: As output increases from 1,000 to 1,400 what is marginal revenue?

Use the figure to calculate the income elasticity of demand when income increases from $25,000 to $30,000:

Managers, profits, and Markets

Demand, supply, and Market Equilibrium

Marginal Analysis for Optimal Decision Making

Basic Estimation Techniques

Theory of Consumer Behavior

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

Exam 6: Elasticity and Demand

When marginal revenue is zero,

In the figure above,what is the point price elasticity of demand when price is $40?

Use the figure below to calculate the cross-price elasticity of demand for good X when the price of good Y increases from $12 to $14:

In the figure above,what is the interval elasticity of demand over the price range $60 to $80?

To answer the question,refer to the following table showing a demand schedule: If price falls from $150 to $100,what is the elasticity of demand over this range?

If E1 is the demand elasticity for a product after a price change has been in effect one day,E2 is the demand elasticity for that product after one week,and E3 is demand elasticity for that product after one month,

Refer to the following figure.When price is $15 and quantity demanded is 1,000,what is the point elasticity of demand?

To answer the question,refer to the following table showing a demand schedule: If price falls from $200 to $150,

If a drought increases the price of corn by 10% and decreases the quantity of corn demanded by 5%,then demand for corn is

In the figure above,if price DECREASES from $80 to $60,an arrow representing the QUANTITY effect

Refer to the following figure.What is the equation for marginal revenue?

In the figure above,what is the point price elasticity of demand when price is $60?

the figure below,which shows a linear demand curve and the associated total revenue curve,to answer the question. The maximum possible total revenue is $_________.

The fact that the cross-price elasticity of natural gas with respect to the price of fuel oil is 0.4 implies that

Demand is more elastic / less elastic)in the short run than in the long run

Refer to the following figure.At a price of $10,the point elasticity of demand for D3 is ________ and marginal revenue is _______.

If the quantity of gidgets demanded increases when the price of gadgets decreases

To answer the question,refer to the following table showing a demand schedule: As output increases from 1,000 to 1,400 what is marginal revenue?

Use the figure to calculate the income elasticity of demand when income increases from $25,000 to $30,000:

Managers, profits, and Markets

Demand, supply, and Market Equilibrium

Marginal Analysis for Optimal Decision Making

Basic Estimation Techniques

Theory of Consumer Behavior

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

If E₁ is the demand elasticity for a product after a price change has been in effect one day,E₂ is the demand elasticity for that product after one week,and E₃ is demand elasticity for that product after one month,

Refer to the following figure.At a price of $10,the point elasticity of demand for D₃ is __ and marginal revenue is _.