Question 1

If the price of a good increases by 10 percent,its quantity demanded drops by 50 percent.The price elasticity of demand is:

Accepted Answer

A)   1.0
B)   0.2
C)   5.0
D)   2.0

Question 2

Whether a cross-price elasticity of demand is positive or negative indicates whether the:

Accepted Answer

A)   goods are substitutes or complements.
B)   elasticity is reported in absolute value.
C)   good's demand is elastic or inelastic.
D)   good is a luxury or a necessity.

Question 3

The calculated price elasticity of demand:

Accepted Answer

A)   is always a negative number, although it is sometimes reported as an absolute value.
B)   is sometimes negative and sometimes positive, depending on the magnitude of response.
C)   is always a positive number, because price and quantity are directly related in terms of demand.
D)   can be positive or negative, but is always reported as an absolute value.

Question 4

Elasticity along a demand curve:

Accepted Answer

A)   is constant if the demand curve is linear.
B)   changes only when the demand curve is bowed out.
C)   changes when the demand curve is linear.
D)   changes only when the demand curve is bowed in.

Question 5

Suppose when the price of movie tickets is $7.50,the quantity demanded is 550,and when the price is $8.50,the quantity demanded is 450.Using the mid-point method,the price elasticity of demand is:

Accepted Answer

A)   0.625
B)   0.625.
C)   1.6
D)   1.6.

Question 6

The demand for a movie ticket is probably _________________ than is the demand for a Broadway show ticket because ______________.

Accepted Answer

A)   less price elastic; a movie ticket requires a smaller portion of one's income.
B)   more price elastic; a movie ticket requires a smaller portion of one's income.
C)   less price elastic; a movie ticket has fewer available substitutes.
D)   more price elastic; a movie ticket has fewer available substitutes.

Question 7

The percentage change in the quantity supplied of a good or service when its price changes by one percent is:

Accepted Answer

A)   price elasticity of supply.
B)   price elasticity of demand.
C)   cross-price elasticity.
D)   income elasticity of supply.

Question 8

A price increase will cause an increase in total revenue when:

Accepted Answer

A)   the price effect outweighs the quantity effect.
B)   the quantity effect outweighs the price effect.
C)   demand is perfectly elastic.
D)   demand is unit elastic.

Question 9

If supply and demand analysis is a measure of how,then elasticity is a measure of:

Accepted Answer

A)   how much.
B)   when.
C)   why.
D)   how quickly.

Question 10

It is likely that ______________ has an income elasticity less than 1,and _____________ have an income elasticity more than 1.

Accepted Answer

A)   coffee; sailboats
B)   sailboats; cars
C)   vacations; cell phones
D)   filet mignon; chicken

Question 11

If the price of cereal increases by 10 percent and the amount of milk demanded decreases by 2 percent,then the cross-price elasticity of these goods is:

Accepted Answer

A)   5.
B)   5
C)   0.2.
D)   0.2

Question 12

If increasing the admission charge for National Parks increases the National Park Service's total revenue,then the demand for National Park visits is:

Accepted Answer

A)   inelastic.
B)   elastic.
C)   perfectly elastic.
D)   a perfectly horizontal line.

Question 13

Suppose when the price of novels goes from $15 to $20 per book,production increases from 760 million books to 840 million books per year.Using the mid-point method,the price elasticity of supply is:

Accepted Answer

A)   0.77
B)   28.5 percent
C)   37 percent
D)   0.35

Question 14

Which elasticity measures producers' responsiveness to a change in price?

Accepted Answer

A)   Price elasticity of demand
B)   Cross-price elasticity
C)   Price elasticity of supply
D)   Income elasticity of supply

Question 15

Considering the concept of cross-price elasticity,if two goods are substitutes:

Accepted Answer

A)   an increase in the price of one causes a decrease in the demand for the other.
B)   a decrease in the price of one causes an increase in the demand of the other.
C)   an increase in the price of one causes an increase in the demand for the other.
D)   the cross-price elasticity is negative.

Question 16

Income elasticity will be positive for:

Accepted Answer

A)   all normal goods.
B)   all inferior goods.
C)   only necessities.
D)   only luxury goods with substitutes.

Question 17

Income elasticity of demand describes:

Accepted Answer

A)   how much the quantity demanded changes in response to a change in consumers' incomes.
B)   which way the demand shifts in response to a change in price.
C)   how much the quantity demanded changes in response to a change in price.
D)   how quickly the market will change in response to a change in consumers' incomes.

Question 18

Suppose price decreases from $27.00 to $13.00.Using the mid-point formula,the percentage change in price is:

Accepted Answer

A)   0.35 = 35 percent.
B)   0.7 = 70 percent.
C)   0.7 = 70 percent
D)   14 percent.

Question 19

The most commonly used measures of elasticity are:

Accepted Answer

A)   income elasticity of demand and price elasticity of supply.
B)   price elasticity of demand and price elasticity of supply.
C)   cross-price elasticity of demand and cross-price elasticity of supply.
D)   price elasticity of demand and cross-price elasticity of supply.

Question 20

Mathematically,price elasticity of demand is the percentage change in the:

Accepted Answer

A)   quantity demanded of a good in response to a given percentage change in the price of the good.
B)   price of a good that is demanded in response to a given percentage change in quantity.
C)   quantity of a good that is supplied in response to a given percentage change in price.
D)   price of a good that is supplied in response to a given percentage change in quantity.

Exam 4: Elasticity

If supply and demand analysis is a measure of how,then elasticity is a measure of:

Correct AnswerverifiedShow Answer

Suppose when the price of novels goes from $15 to $20 per book,production increases from 760 million books to 840 million books per year.Using the mid-point method,the price elasticity of supply is:

Correct AnswerverifiedShow Answer

Suppose when the price of movie tickets is $7.50,the quantity demanded is 550,and when the price is $8.50,the quantity demanded is 450.Using the mid-point method,the price elasticity of demand is:

Correct AnswerverifiedShow Answer

Which elasticity measures producers' responsiveness to a change in price?

Correct AnswerverifiedShow Answer

Income elasticity will be positive for:

Correct AnswerverifiedShow Answer

Suppose price decreases from $27.00 to $13.00.Using the mid-point formula,the percentage change in price is:

Correct AnswerverifiedShow Answer

The demand for a movie ticket is probably _________________ than is the demand for a Broadway show ticket because ______________.

Correct AnswerverifiedShow Answer

Mathematically,price elasticity of demand is the percentage change in the:

Correct AnswerverifiedShow Answer

If the price of a good increases by 10 percent,its quantity demanded drops by 50 percent.The price elasticity of demand is:

Correct AnswerverifiedShow Answer

Considering the concept of cross-price elasticity,if two goods are substitutes:

Correct AnswerverifiedShow Answer

The most commonly used measures of elasticity are:

Correct AnswerverifiedShow Answer

If increasing the admission charge for National Parks increases the National Park Service's total revenue,then the demand for National Park visits is:

Correct AnswerverifiedShow Answer

The percentage change in the quantity supplied of a good or service when its price changes by one percent is:

Correct AnswerverifiedShow Answer

Whether a cross-price elasticity of demand is positive or negative indicates whether the:

Correct AnswerverifiedShow Answer

Elasticity along a demand curve:

Correct AnswerverifiedShow Answer

The calculated price elasticity of demand:

Correct AnswerverifiedShow Answer

If the price of cereal increases by 10 percent and the amount of milk demanded decreases by 2 percent,then the cross-price elasticity of these goods is:

Correct AnswerverifiedShow Answer

A price increase will cause an increase in total revenue when:

Correct AnswerverifiedShow Answer

Income elasticity of demand describes:

Correct AnswerverifiedShow Answer

It is likely that ______________ has an income elasticity less than 1,and _____________ have an income elasticity more than 1.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The demand for a movie ticket is probably ___ than is the demand for a Broadway show ticket because .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

It is likely that __ has an income elasticity less than 1,and _ have an income elasticity more than 1.

Correct Answer
verified