Question 1

Exhibit 5-15   Which of the demand curves in Exhibit 5-15 has constant elasticity everywhere?

Accepted Answer

A) the curve in graph c only 
B) the curves in graphs a and b 
C) the curves in graphs a, b, and c 
D) all of the curves shown 
E) the curves in graphs c, d, and e 
A) the curve in graph c only 
B) the curves in graphs a and b 
C) the curves in graphs a, b, and c 
D) all of the curves shown 
E) the curves in graphs c, d, and e

Question 2

For which of the following products is the consumer's demand curve most likely to be vertical?

Accepted Answer

A) lobster, for a seafood lover 
B) cars, for high school students 
C) insulin, for a diabetic 
D) compact disks, for a music lover 
E) beef, for a food lover 
A) lobster, for a seafood lover 
B) cars, for high school students 
C) insulin, for a diabetic 
D) compact disks, for a music lover 
E) beef, for a food lover

Question 3

Exhibit 5-28   Consider Exhibit 5-28.Between points a and b, demand would be said to be

Accepted Answer

A) perfecly price inelastic 
B) price inelastic 
C) perfectly price elastic 
D) price elastic 
E) unitary elastic 
A) perfecly price inelastic 
B) price inelastic 
C) perfectly price elastic 
D) price elastic 
E) unitary elastic

Question 4

If the demand for swordfish is price elastic and the price of swordfish increases, then

Accepted Answer

A) the quantity of swordfish demanded will increase 
B) the total revenue from swordfish sales will decrease 
C) the total revenue from swordfish sales will increase 
D) the total revenue from swordfish sales will not change 
E) whether total revenue rises or falls depends on how much the price of swordfish increases 
A) the quantity of swordfish demanded will increase 
B) the total revenue from swordfish sales will decrease 
C) the total revenue from swordfish sales will increase 
D) the total revenue from swordfish sales will not change 
E) whether total revenue rises or falls depends on how much the price of swordfish increases

Question 5

If the price elasticity of supply in the kiwi fruit industry equals 1, supply is

Accepted Answer

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

Question 6

Exhibit 5-28   Consider Exhibit 5-28.When supply increase from S1 to S2, total revenue increases from $275 to $300.This means that demand must be

Accepted Answer

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

Question 7

Exhibit 5-5   In Exhibit 5-5, what is the total revenue at point a?

Accepted Answer

A) $4 
B) $5 
C) $10 
D) $50 
E) $100 
A) $4 
B) $5 
C) $10 
D) $50 
E) $100

Question 8

Exhibit 5-21   Which supply curve is more elastic in Exhibit 5-21?

Accepted Answer

A) Both S and S' have the same elasticity. 
B) S is more elastic at lower prices and S' is more elastic at higher prices. 
C) S is more elastic at higher prices and S' is more elastic at lower prices. 
D) S 
E) S' 
A) Both S and S' have the same elasticity. 
B) S is more elastic at lower prices and S' is more elastic at higher prices. 
C) S is more elastic at higher prices and S' is more elastic at lower prices. 
D) S 
E) S'

Question 9

If supply is perfectly elastic, the supply curve is

Accepted Answer

A) vertical 
B) horizontal 
C) any straight-line supply curve 
D) any supply curve intersecting a perfectly elastic demand curve 
E) any supply curve intersecting a demand curve which is unit elastic 
A) vertical 
B) horizontal 
C) any straight-line supply curve 
D) any supply curve intersecting a perfectly elastic demand curve 
E) any supply curve intersecting a demand curve which is unit elastic

Question 10

Exhibit 5-3   Use the information in Exhibit 5-3 to calculate the value of price elasticity of demand for restaurant meals.

Accepted Answer

A) -1/2 
B) -5/3 
C) -3/5 
D) -3/7 
E) -7/3 
A) -1/2 
B) -5/3 
C) -3/5 
D) -3/7 
E) -7/3

Question 11

The supply of paintings by Van Gogh is most likely to be

Accepted Answer

A) of infinite elasticity because supply is limited 
B) of high elasticity because supply is limited 
C) elastic because the paintings are luxury goods 
D) inelastic because supply is limited 
E) unit elastic 
A) of infinite elasticity because supply is limited 
B) of high elasticity because supply is limited 
C) elastic because the paintings are luxury goods 
D) inelastic because supply is limited 
E) unit elastic

Question 12

Total revenue is the same for every price-quantity combination along a unit elastic demand curve.

Accepted Answer

A) True 
 B)False

Question 13

A government-imposed price floor above the market price of milk would increase consumers' expenditures on milk only if

Accepted Answer

A) demand is elastic 
B) supply is inelastic 
C) demand falls 
D) demand is inelastic 
E) supply is unit elastic 
A) demand is elastic 
B) supply is inelastic 
C) demand falls 
D) demand is inelastic 
E) supply is unit elastic

Question 14

For which of the following is demand likely to be most price-elastic?

Accepted Answer

A) steak 
B) beef (including steak, ribs, hamburger, etc.) 
C) meat (including beef, pork, chicken, lamb, etc.) 
D) protein foods (including meat, cheese, beans, eggs, fish, etc.) 
E) none of the above (they will all have the same elasticity) 
A) steak 
B) beef (including steak, ribs, hamburger, etc.) 
C) meat (including beef, pork, chicken, lamb, etc.) 
D) protein foods (including meat, cheese, beans, eggs, fish, etc.) 
E) none of the above (they will all have the same elasticity)

Question 15

Demand is unit elastic whenever

Accepted Answer

A) price elasticity has an absolute value of 1 
B) price elasticity has an absolute value greater than 1 
C) price elasticity has an absolute value less than 1 
D) price elasticity is negative 
E) consumers always respond to a one-dollar change in price by decreasing their quantity demanded by one unit 
A) price elasticity has an absolute value of 1 
B) price elasticity has an absolute value greater than 1 
C) price elasticity has an absolute value less than 1 
D) price elasticity is negative 
E) consumers always respond to a one-dollar change in price by decreasing their quantity demanded by one unit

Question 16

A perfectly elastic demand curve is

Accepted Answer

A) a vertical straight line 
B) a horizontal straight line 
C) a downward-sloping straight line 
D) an upward-sloping straight line 
E) not a straight line 
A) a vertical straight line 
B) a horizontal straight line 
C) a downward-sloping straight line 
D) an upward-sloping straight line 
E) not a straight line

Question 17

As producers have more time to adjust to a price change, price elasticity of supply

Accepted Answer

A) increases 
B) decreases 
C) remains the same 
D) rises and then falls 
E) falls and then rises 
A) increases 
B) decreases 
C) remains the same 
D) rises and then falls 
E) falls and then rises

Question 18

An inferior good is one for which demand increases as

Accepted Answer

A) price decreases 
B) price increases 
C) income increases 
D) income decreases 
E) the price of a related good decreases 
A) price decreases 
B) price increases 
C) income increases 
D) income decreases 
E) the price of a related good decreases

Question 19

Exhibit 5-16   Consider Exhibit 5-16.Since the product P x Q remains constant between points a and b, demand must be

Accepted Answer

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

Question 20

Exhibit 5-26   Refer to Exhibit 5-26.Between points B and C price elasticity of demand is:

Accepted Answer

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

Exam 5: Elasticity of Demand and Supply

Exhibit 5-15 Which of the demand curves in Exhibit 5-15 has constant elasticity everywhere?

For which of the following products is the consumer's demand curve most likely to be vertical?

Exhibit 5-28 Consider Exhibit 5-28.Between points a and b, demand would be said to be

If the demand for swordfish is price elastic and the price of swordfish increases, then

If the price elasticity of supply in the kiwi fruit industry equals 1, supply is

Exhibit 5-28 Consider Exhibit 5-28.When supply increase from S1 to S2, total revenue increases from $275 to $300.This means that demand must be

Exhibit 5-5 In Exhibit 5-5, what is the total revenue at point a?

Exhibit 5-21 Which supply curve is more elastic in Exhibit 5-21?

If supply is perfectly elastic, the supply curve is

Exhibit 5-3 Use the information in Exhibit 5-3 to calculate the value of price elasticity of demand for restaurant meals.

The supply of paintings by Van Gogh is most likely to be

Total revenue is the same for every price-quantity combination along a unit elastic demand curve.

A government-imposed price floor above the market price of milk would increase consumers' expenditures on milk only if

For which of the following is demand likely to be most price-elastic?

Demand is unit elastic whenever

A perfectly elastic demand curve is

As producers have more time to adjust to a price change, price elasticity of supply

An inferior good is one for which demand increases as

Exhibit 5-16 Consider Exhibit 5-16.Since the product P x Q remains constant between points a and b, demand must be

Exhibit 5-26 Refer to Exhibit 5-26.Between points B and C price elasticity of demand is:

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters

Exhibit 5-28 Consider Exhibit 5-28.When supply increase from S₁ to S₂, total revenue increases from $275 to $300.This means that demand must be