Question 1

A tax that is imposed as a specific amount per unit of a good is a(n)

Accepted Answer

A) excise or specific tax. 
B) sales or ad valorem tax. 
C) compound duty. 
D) income tax.

Question 2

If an item has several good substitutes,the demand curve for that item is likely to be

Accepted Answer

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

Question 3

The cross-price elasticity of demand for coffee and tea is likely to be

Accepted Answer

A) greater than zero. 
B) less than zero. 
C) zero. 
D) infinity.

Question 4

If a firm decreases the price of a good and total revenue decreases,then

Accepted Answer

A) the demand for this good is price elastic. 
B) the demand for this good is price inelastic. 
C) the cross elasticity is negative. 
D) the income elasticity is less than 1.

Question 5

When purchases of tennis socks decline following an increase in the price of tennis sneakers (other things remaining equal),the relationship between these two items can be described as

Accepted Answer

A) substitutable. 
B) complementary. 
C) unique. 
D) ordinary.

Question 6

The income elasticity for most staple foods,such as wheat,is known to be between zero and one.
a.As incomes rise over time,what will happen to the demand for wheat?
b.What will happen to the quantity of wheat purchased by consumers?
c.What will happen to the percentage of their budgets that consumers spend on wheat?
d.All other things equal,are farmers likely to be relatively better off or relatively worse off in periods of rising incomes?

Accepted Answer

The answer of The income elasticity for most staple foods,such...

Question 7

If the consumption of sugar does not change at all following a price increase from 50 cents per pound to 65 cents per pound,the demand for sugar is considered to be

Accepted Answer

A) relatively inelastic. 
B) perfectly elastic. 
C) perfectly inelastic. 
D) unitary elastic.

Question 8

Assuming mustard and burgers are complements,a decline in the price of burgers will

Accepted Answer

A) decrease the demand for burgers. 
B) decrease in the quantity demanded of burgers. 
C) increase the demand for mustard. 
D) decrease the demand for mustard.

Question 9

Demand is given by Q_D = 6000 - 50P.Domestic supply is Q_S = 25P.Foreign producers can supply any quantity at a price of $40. a.If foreign producers can sell in the domestic market,what is the equilibrium price? What is the equilibrium quantity? How much is sold by domestic and foreign producers,respectively? b.Under domestic government pressure,foreign producers voluntarily agree to restrict their goods.What will happen to the price and quantity? What will happen to the amount that domestic producers supply? What will happen to revenues of domestic and foreign producers?

Accepted Answer

The answer of Demand is given by Q_D = 6000...

Question 10

If the price elasticity of supply of a good is elastic and the good price increases,then the increase in the good's supply should be

Accepted Answer

A) greater than the increase in price. 
B) less than the increase in price. 
C) the same as the increase in price. 
D) Cannot be determined from this information

Question 11

Suppose the price of beans rises from $1.00 a pound to $2.00 a pound,quantity demanded falls from 10 units to 6 units,the coefficient of elasticity of demand for beans using the arc elasticity approach is

Accepted Answer

A) -1.33. 
B) -0.75. 
C) -0.4. 
D) -0.25.

Question 12

Unions have generally been far more successful in organizing and raising wages in skilled trades such as carpentry than in unskilled trades.Use the laws of derived demand to explain why.

Accepted Answer

The answer of Unions have generally been far more successful...

Question 13

Remembering that demand elasticity is defined as the percentage change in quantity divided by the percentage change in price,if price decreases and,in percentage terms,quantity rises more than price has dropped,total revenue will

Accepted Answer

A) increase. 
B) decrease. 
C) remain the same. 
D) either increase or decrease.

Question 14

Domestic demand for a good is Q_D = 3000 - 25P.The domestic supply of the good is Q_S = 20P.Foreign producers can supply any quantity at a price (P)of $30. a.What is the domestic equilibrium price and quantity? b.At this domestic equilibrium price,how much of the good will be supplied by domestic producers and how much by foreign producers?

Accepted Answer

The answer of Domestic demand for a good is Q_D...

Question 15

The demand curve is: Q_D = 500 - 1/2 P. a.Calculate the (point)price elasticity of demand when price is $100.Is demand elastic or inelastic? b.Calculate the (point)price elasticity of demand when price is $700.Is demand elastic or inelastic? c.Find the point at which point elasticity is equal to -1.

Accepted Answer

The answer of The demand curve is: Q_D = 500...

Question 16

The price elasticity of demand is a measure of

Accepted Answer

A) the responsiveness of the quantity demanded to price changes. 
B) the quantity demanded at a given price. 
C) the shift in the demand curve when price changes. 
D) the demand for a product holding price constant.

Question 17

$\text {Table 1}$
$\text {The following information is provided for Tony Romo's income and expenditures.}$

$$\begin{array}{l}
\underline{\text { Quantity Purchased per Month }}\
\begin{array}{ccc}
\underline{\text { Monthly Income }} & \underline{\text { Steaks }}&\underline{ \text { Pizzas } }\
\$ 2,000 & 2 & 8 \
\$ 3,000 & 4 & 6
\end{array}
\end{array}$$
-In Table 1,pizzas are classified as a(n)

Accepted Answer

A) normal good. 
B) positive good. 
C) inferior goods. 
D) marginal good.

Question 18

The government unit that wants to achieve "revenue enhancement" will find it considerably more favorable to enact an excise tax on goods whose demand is

Accepted Answer

A) highly elastic. 
B) relatively elastic. 
C) highly inelastic. 
D) unitary elastic.

Question 19

If the demand for a product is said to be relatively inelastic,the "absolute" value of the elasticity coefficient will be

Accepted Answer

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

Question 20

Suppose the price of beans rises from $1.00 a pound to $2.00 a pound,quantity demanded falls from 10 units to 6 units.In this example,the demand for beans is said to be

Accepted Answer

A) relatively elastic. 
B) relatively inelastic. 
C) perfectly elastic. 
D) perfectly inelastic.

Exam 4: Demand Elasticity

A tax that is imposed as a specific amount per unit of a good is a(n)

If an item has several good substitutes,the demand curve for that item is likely to be

The cross-price elasticity of demand for coffee and tea is likely to be

If a firm decreases the price of a good and total revenue decreases,then

When purchases of tennis socks decline following an increase in the price of tennis sneakers (other things remaining equal) ,the relationship between these two items can be described as

If the consumption of sugar does not change at all following a price increase from 50 cents per pound to 65 cents per pound,the demand for sugar is considered to be

Assuming mustard and burgers are complements,a decline in the price of burgers will

If the price elasticity of supply of a good is elastic and the good price increases,then the increase in the good's supply should be

Suppose the price of beans rises from $1.00 a pound to $2.00 a pound,quantity demanded falls from 10 units to 6 units,the coefficient of elasticity of demand for beans using the arc elasticity approach is

Unions have generally been far more successful in organizing and raising wages in skilled trades such as carpentry than in unskilled trades.Use the laws of derived demand to explain why.

Remembering that demand elasticity is defined as the percentage change in quantity divided by the percentage change in price,if price decreases and,in percentage terms,quantity rises more than price has dropped,total revenue will

The demand curve is: Q_D = 500 - 1/2 P. a.Calculate the (point)price elasticity of demand when price is $100.Is demand elastic or inelastic? b.Calculate the (point)price elasticity of demand when price is $700.Is demand elastic or inelastic? c.Find the point at which point elasticity is equal to -1.

The price elasticity of demand is a measure of

The government unit that wants to achieve "revenue enhancement" will find it considerably more favorable to enact an excise tax on goods whose demand is

If the demand for a product is said to be relatively inelastic,the "absolute" value of the elasticity coefficient will be

Suppose the price of beans rises from $1.00 a pound to $2.00 a pound,quantity demanded falls from 10 units to 6 units.In this example,the demand for beans is said to be

Exam 4: Demand Elasticity

A tax that is imposed as a specific amount per unit of a good is a(n)

If an item has several good substitutes,the demand curve for that item is likely to be

The cross-price elasticity of demand for coffee and tea is likely to be

If a firm decreases the price of a good and total revenue decreases,then

When purchases of tennis socks decline following an increase in the price of tennis sneakers (other things remaining equal) ,the relationship between these two items can be described as

If the consumption of sugar does not change at all following a price increase from 50 cents per pound to 65 cents per pound,the demand for sugar is considered to be

Assuming mustard and burgers are complements,a decline in the price of burgers will

If the price elasticity of supply of a good is elastic and the good price increases,then the increase in the good's supply should be

Suppose the price of beans rises from $1.00 a pound to $2.00 a pound,quantity demanded falls from 10 units to 6 units,the coefficient of elasticity of demand for beans using the arc elasticity approach is

Unions have generally been far more successful in organizing and raising wages in skilled trades such as carpentry than in unskilled trades.Use the laws of derived demand to explain why.

Remembering that demand elasticity is defined as the percentage change in quantity divided by the percentage change in price,if price decreases and,in percentage terms,quantity rises more than price has dropped,total revenue will

The demand curve is: QD = 500 - 1/2 P. a.Calculate the (point)price elasticity of demand when price is $100.Is demand elastic or inelastic? b.Calculate the (point)price elasticity of demand when price is $700.Is demand elastic or inelastic? c.Find the point at which point elasticity is equal to -1.

The price elasticity of demand is a measure of

The government unit that wants to achieve "revenue enhancement" will find it considerably more favorable to enact an excise tax on goods whose demand is

If the demand for a product is said to be relatively inelastic,the "absolute" value of the elasticity coefficient will be

Suppose the price of beans rises from $1.00 a pound to $2.00 a pound,quantity demanded falls from 10 units to 6 units.In this example,the demand for beans is said to be