Question 1

Refer to the following figure.When price is $10 and quantity demanded is 2,000,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 2

In the figure above,if price DECREASES from $60 to $40,an arrow representing the QUANTITY effect

Accepted Answer

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

Question 3

When demand is elastic,

Accepted Answer

A) marginal revenue is negative. 
B) the percentage change in price exceeds the percentage change in quantity. 
C) an increase in price causes total revenue to rise. 
D) both b and c 
E) none of the above 
A) marginal revenue is negative. 
B) the percentage change in price exceeds the percentage change in quantity. 
C) an increase in price causes total revenue to rise. 
D) both b and c 
E) none of the above

Question 4

Refer to the following figure.At a price of $6,the point elasticity of demand for D1 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 5

If the price elasticity of DVD recorders is-0.3 and price increases 20%,what happens to the quantity of DVD recorders demanded?

Accepted Answer

A) quantity decreases by 26% 
B) quantity decreases by 6% 
C) quantity increases by 15% 
D) quantity increases by 21% 
A) quantity decreases by 26% 
B) quantity decreases by 6% 
C) quantity increases by 15% 
D) quantity increases by 21%

Question 6

Perfume industry statistics show that over the past five years,the number of bottles of perfume sold decreased by 30%,but the total dollar amount spent by consumers was unchanged.This means that

Accepted Answer

A) consumers were unresponsive to changes in price,i.e.,the percentage change in quantity demanded was less than the percentage change in price. 
B) demand was elastic. 
C) demand was inelastic. 
D) demand was unitary elastic. 
E) both a and c 
A) consumers were unresponsive to changes in price,i.e.,the percentage change in quantity demanded was less than the percentage change in price. 
B) demand was elastic. 
C) demand was inelastic. 
D) demand was unitary elastic. 
E) both a and c

Question 7

Total revenue increased for a firm operating in the elastic range of its demand curve.Which of the following statements is correct?

Accepted Answer

A) The firm must have raised price. 
B) The firm must have lowered price. 
C) Quantity demanded must have increased. 
D) both a and c 
E) both b and c 
A) The firm must have raised price. 
B) The firm must have lowered price. 
C) Quantity demanded must have increased. 
D) both a and c 
E) both b and c

Question 8

Refer to the following figure.When quantity demanded is 3,000,what is marginal revenue?

Accepted Answer

A) $12 
B) $15 
C) 0 
D) $10 
E) -$10 
A) $12 
B) $15 
C) 0 
D) $10 
E) -$10

Question 9

The cross-price elasticity of demand between goods X and Y

Accepted Answer

A) measures the responsiveness of the quantity of X demanded to changes in the price of Y. 
B) is the percentage change in the price of Y divided by the percentage change in the quantity of X demanded. 
C) is greater than zero if X and Y are substitutes. 
D) both a and c 
E) all of the above 
A) measures the responsiveness of the quantity of X demanded to changes in the price of Y. 
B) is the percentage change in the price of Y divided by the percentage change in the quantity of X demanded. 
C) is greater than zero if X and Y are substitutes. 
D) both a and c 
E) all of the above

Question 10

Marginal revenue

Accepted Answer

A) is the change in total revenue when output increases by one unit. 
B) is always greater than zero. 
C) measures the slope of the total revenue curve. 
D) both a and c 
E) all of the above 
A) is the change in total revenue when output increases by one unit. 
B) is always greater than zero. 
C) measures the slope of the total revenue curve. 
D) both a and c 
E) all of the above

Question 11

If the quantity of Harley-Davidson motorcycles demanded decreases by 10% when the price increases by 20%,the price elasticity of demand for Harley-Davidson motorcycles is:

Accepted Answer

A) -0.50 
B) -2.0 
C) -10.0 
D) -20.0 
A) -0.50 
B) -2.0 
C) -10.0 
D) -20.0

Question 12

Refer to the following figure.When price is $5 and quantity demanded is 3,000,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 13

the demand for umbrellas is price inelastic,

Accepted Answer

A) changes in price do not affect the number of umbrellas demanded. 
B) if more umbrellas are sold as the result of a price decrease,total expenditures by consumers on umbrellas will decrease. 
C) the percentage change in price is less than the percentage change in quantity demanded. 
D) the percentage change in quantity demanded is greater than the percentage change in price. 
E) none of the above 
A) changes in price do not affect the number of umbrellas demanded. 
B) if more umbrellas are sold as the result of a price decrease,total expenditures by consumers on umbrellas will decrease. 
C) the percentage change in price is less than the percentage change in quantity demanded. 
D) the percentage change in quantity demanded is greater than the percentage change in price. 
E) none of the above

Question 14

In the figure above,if price INCREASES from $40 to $60,an arrow representing the PRICE effect

Accepted Answer

A) will point upward. 
B) will point downward. 
C) will be longer than and in opposite direction of)the arrow representing the quantity effect. 
D) will be shorter than and in the opposite direction of)the arrow representing the quantity effect. 
E) both a and c 
A) will point upward. 
B) will point downward. 
C) will be longer than and in opposite direction of)the arrow representing the quantity effect. 
D) will be shorter than and in the opposite direction of)the arrow representing the quantity effect. 
E) both a and c

Question 15

Consider the statement: "When the British government tripled university fees for foreign students in Great Britain,about one-half of them left to study in other countries." The implied price elasticity of demand by foreigners for a British education is in absolute value)

Accepted Answer

A) less than 1. 
B) equal to 1. 
C) between 1.0 and 1.5. 
D) greater than 1.5. 
A) less than 1. 
B) equal to 1. 
C) between 1.0 and 1.5. 
D) greater than 1.5.

Question 16

Refer to the following graph to answer the question:   The price elasticity of demand over the price interval $90 to $110 is

Accepted Answer

A) -0.5 
B) -1.0 
C) -1.5 
D) -2.0 
E) -0.4 
A) -0.5 
B) -1.0 
C) -1.5 
D) -2.0 
E) -0.4

Question 17

Which of the following will NOT affect the elasticity of demand for a product?

Accepted Answer

A) the number of substitutes 
B) how long consumers have to adapt to price changes 
C) the cost of producing the product 
D) the percentage of the consumer's budget spent on the product 
E) all of the above will affect the elasticity of demand for a product 
A) the number of substitutes 
B) how long consumers have to adapt to price changes 
C) the cost of producing the product 
D) the percentage of the consumer's budget spent on the product 
E) all of the above will affect the elasticity of demand for a product

Refer to the following figure.When price is $10 and quantity demanded is 2,000,what is the point elasticity of demand?

In the figure above,if price DECREASES from $60 to $40,an arrow representing the QUANTITY effect

When demand is elastic,

Refer to the following figure.At a price of $6,the point elasticity of demand for D₁ is __ and marginal revenue is _.

If the price elasticity of DVD recorders is-0.3 and price increases 20%,what happens to the quantity of DVD recorders demanded?

Perfume industry statistics show that over the past five years,the number of bottles of perfume sold decreased by 30%,but the total dollar amount spent by consumers was unchanged.This means that

Total revenue increased for a firm operating in the elastic range of its demand curve.Which of the following statements is correct?

Refer to the following figure.When quantity demanded is 3,000,what is marginal revenue?

The cross-price elasticity of demand between goods X and Y

Marginal revenue

If the quantity of Harley-Davidson motorcycles demanded decreases by 10% when the price increases by 20%,the price elasticity of demand for Harley-Davidson motorcycles is:

Refer to the following figure.When price is $5 and quantity demanded is 3,000,what is the point elasticity of demand?

the demand for umbrellas is price inelastic,

In the figure above,if price INCREASES from $40 to $60,an arrow representing the PRICE effect

Consider the statement: "When the British government tripled university fees for foreign students in Great Britain,about one-half of them left to study in other countries." The implied price elasticity of demand by foreigners for a British education is in absolute value)

Refer to the following graph to answer the question: The price elasticity of demand over the price interval $90 to $110 is

Which of the following will NOT affect the elasticity of demand for a product?

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

Refer to the following figure.When price is $10 and quantity demanded is 2,000,what is the point elasticity of demand?

In the figure above,if price DECREASES from $60 to $40,an arrow representing the QUANTITY effect

When demand is elastic,

Refer to the following figure.At a price of $6,the point elasticity of demand for D1 is ________ and marginal revenue is _______.

If the price elasticity of DVD recorders is-0.3 and price increases 20%,what happens to the quantity of DVD recorders demanded?

Perfume industry statistics show that over the past five years,the number of bottles of perfume sold decreased by 30%,but the total dollar amount spent by consumers was unchanged.This means that

Total revenue increased for a firm operating in the elastic range of its demand curve.Which of the following statements is correct?

Refer to the following figure.When quantity demanded is 3,000,what is marginal revenue?

The cross-price elasticity of demand between goods X and Y

Marginal revenue

If the quantity of Harley-Davidson motorcycles demanded decreases by 10% when the price increases by 20%,the price elasticity of demand for Harley-Davidson motorcycles is:

Refer to the following figure.When price is $5 and quantity demanded is 3,000,what is the point elasticity of demand?

the demand for umbrellas is price inelastic,

In the figure above,if price INCREASES from $40 to $60,an arrow representing the PRICE effect

Consider the statement: "When the British government tripled university fees for foreign students in Great Britain,about one-half of them left to study in other countries." The implied price elasticity of demand by foreigners for a British education is in absolute value)

Refer to the following graph to answer the question: The price elasticity of demand over the price interval $90 to $110 is

Which of the following will NOT affect the elasticity of demand for a product?

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

Refer to the following figure.At a price of $6,the point elasticity of demand for D₁ is __ and marginal revenue is _.