Question 1

If your demand for gasoline is inelastic, when the price of gasoline falls, which of the following occurs?

Accepted Answer

A)   Your demand curve for gasoline will shift leftward.
B)   Your demand curve for gasoline will shift rightward.
C)   Your total expenditure on gasoline will increase.
D)   Your total expenditure on gasoline will decrease.

Question 2

On a linear demand curve that intersects both axes,

Accepted Answer

A)   the elasticity exceeds 1.00 at all prices.
B)   the elasticity is less than 1.00 at all prices.
C)   the elasticity equals 1.00 at all prices.
D)   the elasticity decreases as the price falls and quantity increases.

Question 3

The demand for computer chips is a downward sloping straight line. If there is an increase in the supply of computer chips, this change will

Accepted Answer

A)   increase the price elasticity of demand for computer chips.
B)   decrease the price elasticity of demand for computer chips.
C)   have no effect on the price elasticity of demand for computer chips.
D)   have an unpredictable effect on the price elasticity of demand for computer chips.

Question 4

If a 5 percent increase in price results in a 3 percent increase in the quantity supplied, the elasticity of supply is

Accepted Answer

A)   0.30.
B)   0.60.
C)   1.20.
D)   1.66.

Question 5

Of the following, demand is likely to be the least elastic for

Accepted Answer

A)   Ford automobiles.
B)   Toyota automobiles.
C)   compact disc players.
D)   toothpicks.

Question 6

If demand for Farmer John's maple syrup is inelastic, then when Farmer John raises the price of maple syrup, his total revenue will

Accepted Answer

A)   increase.
B)   decrease.
C)   stay the same.
D)   probably change, but more information is needed to determine if the total revenue increases, decreases, or stays the same.

Question 7

Starting at the top of a straight-line downward sloping demand curve, as the price falls, total expenditures will

Accepted Answer

A)   initially increase and then decrease.
B)   initially decrease and then increase.
C)   increase along the entire demand curve.
D)   decrease along the entire demand curve.

Question 8

-Steve sells hotdogs from a vending cart downtown. The table above shows his total revenue per day at four different prices. Between which two prices is the demand for hotdogs
a) elastic?
b) unit elastic?
c) inelastic?

Accepted Answer

a) Steve's demand is elastic between $1....

Question 9

-Suppose that business travelers and leisure travelers have the demand schedules for airline tickets from Atlanta to Philadelphia given in the table above.
a) Draw both demand curves.
b) As the price of tickets rises from $200 to $300, what is the price elasticity of business travelers' demand? What is the price elasticity of leisure travelers' demand? (Use the midpoint method in your calculations.)
c) Why do business travelers and leisure travelers have different price elasticities of demand for airline tickets?
d) At what price is the price elasticity of demand equal to 1 for business travelers? For leisure travelers? Explain.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> a) The figure above shows the demand cu...

Question 10

-The figure above shows the demand curve for pizza. Using the midpoint method and moving from point A to point B, calculate the
a) percentage change in price.
b) percentage change in quantity demanded.
c) price elasticity of demand.

Accepted Answer

a) Between points A and B, the...

Question 11

The price elasticity of demand for meat in general is inelastic while the price elasticity of demand for turkey or chicken is more elastic. Why?

Accepted Answer

A)   Turkey and chicken are not red meat. Because they are not the same as other meats, they should have different elasticities.
B)   Turkey and chicken have many substitutes, such as fish or beef, while meat in general has fewer substitutes.
C)   Turkey and chicken are inferior goods.
D)   Turkey and chicken are normal goods.

Question 12

Demand is inelastic if

Accepted Answer

A)   a large change in quantity demanded results in a small change in price.
B)   the quantity demanded is very responsive to changes in price.
C)   the price elasticity of demand is less than 1.
D)   the price elasticity of demand is greater than 1.

Question 13

The demand for movies is unit elastic if

Accepted Answer

A)   a 5 percent decrease in the price leads to an infinite increase in the quantity demanded.
B)   a 5 percent increase in the price leads to a 5 percent decrease in the quantity demanded.
C)   any increase in the price leads to a 1 percent decrease in the quantity demanded.
D)   a 5 percent increase in the price leads to a 5 percent increase in total revenue.

Question 14

Redbox rents DVDs for $1 per day via self-service kiosks located across the United States. The CFO of Redbox wants to identify how responsive consumers are to an increase or decrease in the daily price of a rental. The economic concept the CFO wants to understand is

Accepted Answer

A)   price elasticity of demand.
B)   elasticity of supply.
C)   changes in demand.
D)   changes in supply.

Question 15

-The figure above illustrates a linear demand curve. In the range from $8 to $6,

Accepted Answer

A)   the demand is price elastic.
B)   the demand is unit elastic.
C)   the demand is price inelastic.
D)   more information is needed to determine if the demand is price elastic, unit elastic, or inelastic.

Question 16

When the price of a Caesar salad is $5.00, the demand for Caesar salads is elastic, and when the price is $4.00, the demand is inelastic. If Mike's Roadside Restaurant cuts the price from $5.00 to $4.00, its total revenue from Caesar salads ________.

Accepted Answer

A)   will increase
B)   will decrease
C)   will remain the same
D)   might increase, decrease, or remain the same

Question 17

Taco Bell's economists determine that the price elasticity of demand for their tacos is 2.0. So, if Taco Bell raises the price of its tacos by 6.0 percent, the quantity demanded will decrease by ________ percent.

Accepted Answer

A)   2.0
B)   3.0
C)   6.0
D)   12.0

Question 18

If when income increases by 2 percent and the price does not change, the quantity of airplane travel demanded increases by 6 percent, then the income elasticity of demand of airplane travel is ________.

Accepted Answer

A)   0.33
B)   0
C)   negative
D)   3.00

Question 19

Propecia was developed to treat mild to moderate male pattern hair loss in men. Marco has hair loss and he is willing to pay any amount of money to be able to buy this drug each month. Marco's price elasticity of demand is ________.

Accepted Answer

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

Question 20

The price elasticity of demand ________ in value when moving downward along a ________ line demand curve.

Accepted Answer

A)   falls; straight
B)   rises; curved
C)   falls, curved
D)   rises; straight

Exam 4: Elasticity

Starting at the top of a straight-line downward sloping demand curve, as the price falls, total expenditures will

Correct Answer
verified

If a 5 percent increase in price results in a 3 percent increase in the quantity supplied, the elasticity of supply is

Correct Answer
verified

-Steve sells hotdogs from a vending cart downtown. The table above shows his total revenue per day at four different prices. Between which two prices is the demand for hotdogs a) elastic? b) unit elastic? c) inelastic?

Correct Answer
verified
a) Steve's demand is elastic between $1....
View Answer

Of the following, demand is likely to be the least elastic for

Correct Answer
verified

On a linear demand curve that intersects both axes,

Correct Answer
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Demand is inelastic if

Correct Answer
verified

Correct Answer
verified
a) The figure above shows the demand cu...
View Answer

Taco Bell's economists determine that the price elasticity of demand for their tacos is 2.0. So, if Taco Bell raises the price of its tacos by 6.0 percent, the quantity demanded will decrease by ________ percent.

Correct Answer
verified

-The figure above illustrates a linear demand curve. In the range from $8 to $6,

Correct Answer
verified

The price elasticity of demand in value when moving downward along a line demand curve.

Correct Answer
verified

-The figure above shows the demand curve for pizza. Using the midpoint method and moving from point A to point B, calculate the a) percentage change in price. b) percentage change in quantity demanded. c) price elasticity of demand.

Correct Answer
verified
a) Between points A and B, the...
View Answer

The demand for movies is unit elastic if

Correct Answer
verified

Redbox rents DVDs for $1 per day via self-service kiosks located across the United States. The CFO of Redbox wants to identify how responsive consumers are to an increase or decrease in the daily price of a rental. The economic concept the CFO wants to understand is

Correct Answer
verified

The demand for computer chips is a downward sloping straight line. If there is an increase in the supply of computer chips, this change will

Correct Answer
verified

The price elasticity of demand for meat in general is inelastic while the price elasticity of demand for turkey or chicken is more elastic. Why?

Correct Answer
verified

When the price of a Caesar salad is $5.00, the demand for Caesar salads is elastic, and when the price is $4.00, the demand is inelastic. If Mike's Roadside Restaurant cuts the price from $5.00 to $4.00, its total revenue from Caesar salads ________.

Correct Answer
verified

If when income increases by 2 percent and the price does not change, the quantity of airplane travel demanded increases by 6 percent, then the income elasticity of demand of airplane travel is ________.

Correct Answer
verified

If your demand for gasoline is inelastic, when the price of gasoline falls, which of the following occurs?

Correct Answer
verified

Propecia was developed to treat mild to moderate male pattern hair loss in men. Marco has hair loss and he is willing to pay any amount of money to be able to buy this drug each month. Marco's price elasticity of demand is ________.

Correct Answer
verified

If demand for Farmer John's maple syrup is inelastic, then when Farmer John raises the price of maple syrup, his total revenue will

Correct Answer
verified

Exam 4: Elasticity

Starting at the top of a straight-line downward sloping demand curve, as the price falls, total expenditures will

Correct AnswerverifiedShow Answer

If a 5 percent increase in price results in a 3 percent increase in the quantity supplied, the elasticity of supply is

Correct AnswerverifiedShow Answer

-Steve sells hotdogs from a vending cart downtown. The table above shows his total revenue per day at four different prices. Between which two prices is the demand for hotdogs a) elastic? b) unit elastic? c) inelastic?

Correct Answerverifieda) Steve's demand is elastic between $1....View AnswerShow Answer

Of the following, demand is likely to be the least elastic for

Correct AnswerverifiedShow Answer

On a linear demand curve that intersects both axes,

Correct AnswerverifiedShow Answer

Demand is inelastic if

Correct AnswerverifiedShow Answer

Correct Answerverified a) The figure above shows the demand cu...View AnswerShow Answer

Taco Bell's economists determine that the price elasticity of demand for their tacos is 2.0. So, if Taco Bell raises the price of its tacos by 6.0 percent, the quantity demanded will decrease by ________ percent.

Correct AnswerverifiedShow Answer

-The figure above illustrates a linear demand curve. In the range from $8 to $6,

Correct AnswerverifiedShow Answer

The price elasticity of demand ________ in value when moving downward along a ________ line demand curve.

Correct AnswerverifiedShow Answer

-The figure above shows the demand curve for pizza. Using the midpoint method and moving from point A to point B, calculate the a) percentage change in price. b) percentage change in quantity demanded. c) price elasticity of demand.

Correct Answerverifieda) Between points A and B, the...View AnswerShow Answer

The demand for movies is unit elastic if

Correct AnswerverifiedShow Answer

Redbox rents DVDs for $1 per day via self-service kiosks located across the United States. The CFO of Redbox wants to identify how responsive consumers are to an increase or decrease in the daily price of a rental. The economic concept the CFO wants to understand is

Correct AnswerverifiedShow Answer

The demand for computer chips is a downward sloping straight line. If there is an increase in the supply of computer chips, this change will

Correct AnswerverifiedShow Answer

The price elasticity of demand for meat in general is inelastic while the price elasticity of demand for turkey or chicken is more elastic. Why?

Correct AnswerverifiedShow Answer

When the price of a Caesar salad is $5.00, the demand for Caesar salads is elastic, and when the price is $4.00, the demand is inelastic. If Mike's Roadside Restaurant cuts the price from $5.00 to $4.00, its total revenue from Caesar salads ________.

Correct AnswerverifiedShow Answer

If when income increases by 2 percent and the price does not change, the quantity of airplane travel demanded increases by 6 percent, then the income elasticity of demand of airplane travel is ________.

Correct AnswerverifiedShow Answer

If your demand for gasoline is inelastic, when the price of gasoline falls, which of the following occurs?

Correct AnswerverifiedShow Answer

Propecia was developed to treat mild to moderate male pattern hair loss in men. Marco has hair loss and he is willing to pay any amount of money to be able to buy this drug each month. Marco's price elasticity of demand is ________.

Correct AnswerverifiedShow Answer

If demand for Farmer John's maple syrup is inelastic, then when Farmer John raises the price of maple syrup, his total revenue will

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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a) Steve's demand is elastic between $1....
View Answer

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a) The figure above shows the demand cu...
View Answer

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The price elasticity of demand in value when moving downward along a line demand curve.

Correct Answer
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Correct Answer
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a) Between points A and B, the...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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