Question 1

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-Which of the following goods is likely to have an income elasticity of demand that is less than zero?

Accepted Answer

A) A luxury yacht 
B) A beach house 
C) A state-of-the-art cellular phone 
D) A box of generic macaroni and cheese dinner 
E) A dinner at a French restaurant

Question 2

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2PS1U1B1xS1U1B0. Assume that P = $8, I = 200, and PS1U1B1xS1U1B0 = $10.
-The price elasticity of demand depends on how readily and easily consumers can switch their purchases from one product to another.

Accepted Answer

A) True 
 B)False

Question 3

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-When the price of hot dogs at the supermarket increases, the quantity demanded of hot dog buns declines. This situation describes:

Accepted Answer

A) the income elasticity of demand for hot dogs. 
B) the income elasticity of demand for hot dog buns. 
C) the price elasticity of supply for hot dogs. 
D) the negative cross-price elasticity of demand for hot dogs and hot dog buns. 
E) the positive cross-price elasticity of supply for hot dogs and hot dog buns.

Question 4

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2PS1U1B1xS1U1B0. Assume that P = $8, I = 200, and PS1U1B1xS1U1B0 = $10.
-There are some special types of goods for which supply cannot change, irrespective of the length of time allowed for change, such as Beethoven symphonies. The price elasticity of supply for these goods is _____.

Accepted Answer

A) infinite 
B) nonexistent 
C) negative 
D) zero 
E) unity

Question 5

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-Consider a medical breakthrough that led to the discovery of a simple microchip, which when inserted inside the human ear could prevent certain chronic diseases. The price elasticity of demand for that microchip would most likely be _____.

Accepted Answer

A) highly elastic 
B) highly inelastic 
C) undefined 
D) negative only for high prices 
E) positive only for high prices

Question 6

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2PS1U1B1xS1U1B0. Assume that P = $8, I = 200, and PS1U1B1xS1U1B0 = $10.
-If the price elasticity of demand is between -1 and -, then demand is inelastic.

Accepted Answer

A) True 
 B)False

Question 7

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2PS1U1B1xS1U1B0. Assume that P = $8, I = 200, and PS1U1B1xS1U1B0 = $10.
-When economists speak of the short run, they are referring to _____.

Accepted Answer

A) a specific period of time, usually less than one year 
B) a specific period of time, more than one year, but less than two years 
C) a specific period of time just long enough that the quantities of all resources can be varied 
D) a period of time short enough that the quantities of at least one of the resources cannot be varied 
E) a period of time short enough that none of the quantities of the resources can be varied

Question 8

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2PS1U1B1xS1U1B0. Assume that P = $8, I = 200, and PS1U1B1xS1U1B0 = $10.
-If a product has an elastic demand, it means that consumers are relatively insensitive to a change in the price of the product.

Accepted Answer

A) True 
 B)False

Question 9

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2PS1U1B1xS1U1B0. Assume that P = $8, I = 200, and PS1U1B1xS1U1B0 = $10.
-Since demand curves are mostly downward sloping, economists tend to ignore the negative sign when calculating the price elasticity of demand.

Accepted Answer

A) True 
 B)False

Question 10

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2PS1U1B1xS1U1B0. Assume that P = $8, I = 200, and PS1U1B1xS1U1B0 = $10.
-A perfectly inelastic demand curve is represented by an upward-sloping straight line.

Accepted Answer

A) True 
 B)False

Question 11

​Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market. 
-If the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good, then the demand for the good is _____.

Accepted Answer

A) inelastic 
B) relatively elastic 
C) unit-elastic 
D) perfectly inelastic 
E) income elastic

Question 12

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2PS1U1B1xS1U1B0. Assume that P = $8, I = 200, and PS1U1B1xS1U1B0 = $10.
-Given the above equation, the income elasticity of demand for noodles is _____.

Accepted Answer

A) 5 
B) 0.5 
C) 2 
D) 2.5 
E) 1.6

Question 13

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-A 0.5% increase in the price of a particular product causes the quantity demanded of the product to drop to zero. This means that the price elasticity of demand for the product is:

Accepted Answer

A) ​perfectly elastic. 
B) ​unit-elastic. 
C) ​perfectly inelastic. 
D) ​moderately elastic. 
E) ​moderately inelastic.

Question 14

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2PS1U1B1xS1U1B0. Assume that P = $8, I = 200, and PS1U1B1xS1U1B0 = $10.
-A perfectly elastic demand curve is represented by a vertical line.

Accepted Answer

A) True 
 B)False

Question 15

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2PS1U1B1xS1U1B0. Assume that P = $8, I = 200, and PS1U1B1xS1U1B0 = $10.
-Supply tends to be more elastic in the long run than in the short run.

Accepted Answer

A) True 
 B)False

Question 16

​Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market. 
-Which of the following is true of the price elasticity of demand of a product?

Accepted Answer

A) It measures the responsiveness of quantity demanded or quantity supplied to a change in one of the determinants of demand and/or supply. 
B) It is calculated as the percentage change in the quantity demanded of the product divided by the percentage change in the price of the product. 
C) It is calculated as the percentage change in the demand for the product divided by the percentage change in income of a consumer, everything else held constant. 
D) It measures the responsiveness of demand to a change in the quantity supplied. 
E) It is calculated as the percentage change in the quantity demanded of the product divided by the percentage change in the price of a related product, everything else held constant.

Question 17

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-In the opinion of many consumers, there are few, if any, substitutes for the popular search engine Google. If Google were to charge consumers for its services, it would face:

Accepted Answer

A) a relatively inelastic demand curve. 
B) a relatively elastic demand curve. 
C) a negative income elasticity of demand. 
D) a positive cross elasticity of demand. 
E) a perfectly elastic demand curve.

Question 18

The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income.Table 6.2
 
-Refer to Table 6.2. What is the income elasticity of demand for automobiles?

Accepted Answer

A) 0.5 
B) 0.35 
C) 2 
D) 0.2 
E) Zero

Question 19

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-Suppose the value of price elasticity of demand for goods manufactured by firms A, B, C, and D are 0, -0.8, -1, and -1.5 respectively. The demand for the good will be elastic for:

Accepted Answer

A) firms A, B, C, and D. 
B) firms B, C, and D. 
C) only firm A. 
D) firms C and D only. 
E) only firm D.

Question 20

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2PS1U1B1xS1U1B0. Assume that P = $8, I = 200, and PS1U1B1xS1U1B0 = $10.
-Price elasticity of demand measures the responsiveness of quantity demanded in a market to a change in price.

Accepted Answer

A) True 
 B)False

Exam 6: Elasticity: Demand and Supply

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1 -Which of the following goods is likely to have an income elasticity of demand that is less than zero?

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -The price elasticity of demand depends on how readily and easily consumers can switch their purchases from one product to another.

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1 -When the price of hot dogs at the supermarket increases, the quantity demanded of hot dog buns declines. This situation describes:

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -If the price elasticity of demand is between -1 and -, then demand is inelastic.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -When economists speak of the short run, they are referring to _____.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -If a product has an elastic demand, it means that consumers are relatively insensitive to a change in the price of the product.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -Since demand curves are mostly downward sloping, economists tend to ignore the negative sign when calculating the price elasticity of demand.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -A perfectly inelastic demand curve is represented by an upward-sloping straight line.

Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market. -If the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good, then the demand for the good is _____.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -Given the above equation, the income elasticity of demand for noodles is _____.

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1 -A 0.5% increase in the price of a particular product causes the quantity demanded of the product to drop to zero. This means that the price elasticity of demand for the product is:

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -A perfectly elastic demand curve is represented by a vertical line.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -Supply tends to be more elastic in the long run than in the short run.

Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market. -Which of the following is true of the price elasticity of demand of a product?

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1 -In the opinion of many consumers, there are few, if any, substitutes for the popular search engine Google. If Google were to charge consumers for its services, it would face:

The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income.Table 6.2 -Refer to Table 6.2. What is the income elasticity of demand for automobiles?

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1 -Suppose the value of price elasticity of demand for goods manufactured by firms A, B, C, and D are 0, -0.8, -1, and -1.5 respectively. The demand for the good will be elastic for:

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -Price elasticity of demand measures the responsiveness of quantity demanded in a market to a change in price.

Exam 6: Elasticity: Demand and Supply

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1 -Which of the following goods is likely to have an income elasticity of demand that is less than zero?

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -The price elasticity of demand depends on how readily and easily consumers can switch their purchases from one product to another.

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1 -When the price of hot dogs at the supermarket increases, the quantity demanded of hot dog buns declines. This situation describes:

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -If the price elasticity of demand is between -1 and -, then demand is inelastic.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -When economists speak of the short run, they are referring to _____.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -If a product has an elastic demand, it means that consumers are relatively insensitive to a change in the price of the product.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -Since demand curves are mostly downward sloping, economists tend to ignore the negative sign when calculating the price elasticity of demand.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -A perfectly inelastic demand curve is represented by an upward-sloping straight line.

​Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market. -If the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good, then the demand for the good is _____.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -Given the above equation, the income elasticity of demand for noodles is _____.

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1 -A 0.5% increase in the price of a particular product causes the quantity demanded of the product to drop to zero. This means that the price elasticity of demand for the product is:

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -A perfectly elastic demand curve is represented by a vertical line.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -Supply tends to be more elastic in the long run than in the short run.

​Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market. -Which of the following is true of the price elasticity of demand of a product?

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1 -In the opinion of many consumers, there are few, if any, substitutes for the popular search engine Google. If Google were to charge consumers for its services, it would face:

The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income.Table 6.2 -Refer to Table 6.2. What is the income elasticity of demand for automobiles?

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1 -Suppose the value of price elasticity of demand for goods manufactured by firms A, B, C, and D are 0, -0.8, -1, and -1.5 respectively. The demand for the good will be elastic for:

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -Price elasticity of demand measures the responsiveness of quantity demanded in a market to a change in price.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -The price elasticity of demand depends on how readily and easily consumers can switch their purchases from one product to another.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -If the price elasticity of demand is between -1 and -, then demand is inelastic.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -When economists speak of the short run, they are referring to _____.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -If a product has an elastic demand, it means that consumers are relatively insensitive to a change in the price of the product.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -Since demand curves are mostly downward sloping, economists tend to ignore the negative sign when calculating the price elasticity of demand.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -A perfectly inelastic demand curve is represented by an upward-sloping straight line.

Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market. -If the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good, then the demand for the good is _____.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -Given the above equation, the income elasticity of demand for noodles is _____.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -A perfectly elastic demand curve is represented by a vertical line.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -Supply tends to be more elastic in the long run than in the short run.

Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market. -Which of the following is true of the price elasticity of demand of a product?

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -Price elasticity of demand measures the responsiveness of quantity demanded in a market to a change in price.