Question 1

When measured along a linear downward-sloping demand curve,the price elasticity:

Accepted Answer

A) remains constant and is greater than one. 
B) remains constant and is less than one. 
C) increases in absolute value from left to right. 
D) decreases in absolute value from left to right. 
A) remains constant and is greater than one. 
B) remains constant and is less than one. 
C) increases in absolute value from left to right. 
D) decreases in absolute value from left to right.

Question 2

In the long run,the price elasticity of supply is limited because of the principle of diminishing returns.

Accepted Answer

A) True 
 B)False

Question 3

If the supply curve is relatively steep,then the price elasticity of supply will be:

Accepted Answer

A) elastic. 
B) inelastic. 
C) unit elastic. 
D) greater than one. 
A) elastic. 
B) inelastic. 
C) unit elastic. 
D) greater than one.

Question 4

If the quantity demanded of soda increases by 4% when the price of coffee increases by 16%,the cross-price elasticity of demand between soda and coffee is:

Accepted Answer

A) -0.25. 
B) 0.25. 
C) -12.0. 
D) 12.0. 
A) -0.25. 
B) 0.25. 
C) -12.0. 
D) 12.0.

Question 5

The price elasticity of supply tends to become more elastic in the long run.

Accepted Answer

A) True 
 B)False

Question 6

The price elasticity of demand for gasoline is 0.8.What must occur to the price of gasoline in order for quantity demanded to rise by 20 percent?

Accepted Answer

[20]/[percentage cha

Question 7

-Refer to Figure 5.3.At point C the price elasticity of demand is 1.Along line segment BC of the demand curve,the demand is:

Accepted Answer

A) elastic. 
B) unitarily elastic. 
C) inelastic. 
D) either elastic or inelastic,depending on whether price increases or decreases. 
A) elastic. 
B) unitarily elastic. 
C) inelastic. 
D) either elastic or inelastic,depending on whether price increases or decreases.

Question 8

Recall the illustration regarding antidrug policies and property crimes.What is the connection between antidrug policies and property crimes such as robbery,burglary,and auto theft?

Accepted Answer

A) An antidrug policy that increases drug prices will reduce drug consumption,but will also increase the amount of property crime committed by addicts who continue to abuse drugs. 
B) An antidrug policy that increases drug prices will reduce drug consumption,but will also decrease the amount of property crime committed by addicts who continue to abuse drugs. 
C) The demand for illegal drugs is elastic,the increase in price will increase total spending on illegal drugs 
D) The demand for illegal drugs is inelastic,the increase in price will decrease total spending on illegal drugs 
A) An antidrug policy that increases drug prices will reduce drug consumption,but will also increase the amount of property crime committed by addicts who continue to abuse drugs. 
B) An antidrug policy that increases drug prices will reduce drug consumption,but will also decrease the amount of property crime committed by addicts who continue to abuse drugs. 
C) The demand for illegal drugs is elastic,the increase in price will increase total spending on illegal drugs 
D) The demand for illegal drugs is inelastic,the increase in price will decrease total spending on illegal drugs

Question 9

Suppose that the price elasticity of demand for milk is 0.9 and the price elasticity of supply for milk is 1.1,then a 6% increase in the demand for the product can be expected to increase the price by 2.5%.

Accepted Answer

A) True 
 B)False

Question 10

Suppose the price elasticity of supply for poker chips is .7 and the price decreases by 30%.The quantity supplied will decrease by ________ %.

Accepted Answer

A) 25 
B) 30 
C) 15 
D) 21 
A) 25 
B) 30 
C) 15 
D) 21

Question 11

What does the income elasticity of demand measure? How is it calculated?

Accepted Answer

The income elasticity of demand measures

Question 12

What does the price elasticity of supply measure? How is it calculated?

Accepted Answer

The elasticity of supply measu

Question 13

Elasticity of demand is:

Accepted Answer

A) the same as the slope of the demand curve. 
B) the change in price for a given change in quantity demanded. 
C) measured in dollars. 
D) a measure of the percentage change in quantity demanded for a given percentage change in price. 
A) the same as the slope of the demand curve. 
B) the change in price for a given change in quantity demanded. 
C) measured in dollars. 
D) a measure of the percentage change in quantity demanded for a given percentage change in price.

Question 14

Suppose that the price elasticity of demand for an ice cream cone is 1.9.If the local ice cream shop owner wants to increase total revenue,what would you recommend he or she do?

Accepted Answer

The owner should lower the price of ice

Question 15

When moving upward the along a liner demand curve,what happens to the price elasticity of the demand?

Accepted Answer

A) decreases 
B) increases 
C) stays the same 
D) none of the above 
A) decreases 
B) increases 
C) stays the same 
D) none of the above

Question 16

If the price elasticity of supply of CDs is 0.8,then the supply is inelastic.

Accepted Answer

A) True 
 B)False

Question 17

Taxi fares in Cleveland are set by the city government.Suppose that the local taxi companies petition the city council to raise taxi fares.Despite the fact that higher fares will ________ the quantity demanded for taxi cab rides,the taxi companies must believe that demand for taxis is ________ and therefore that revenue will ________.

Accepted Answer

A) decrease;inelastic;increase 
B) decrease;elastic;increase 
C) decrease;inelastic;decrease 
D) increase;inelastic;increase 
A) decrease;inelastic;increase 
B) decrease;elastic;increase 
C) decrease;inelastic;decrease 
D) increase;inelastic;increase

Question 18

Two goods are complements if the:

Accepted Answer

A) price elasticity of each is greater than one. 
B) income elasticity of each is negative. 
C) cross-price elasticity is negative. 
D) cross-price elasticity is positive. 
A) price elasticity of each is greater than one. 
B) income elasticity of each is negative. 
C) cross-price elasticity is negative. 
D) cross-price elasticity is positive.

Question 19

If the demand for a product is perfectly inelastic,then which of the following is most likely to be true?

Accepted Answer

A) The product is extremely important,or necessary,to those who buy it. 
B) The product has many substitutes. 
C) The demand curve for the good is horizontal. 
D) The price elasticity of demand for that product is equal to one. 
A) The product is extremely important,or necessary,to those who buy it. 
B) The product has many substitutes. 
C) The demand curve for the good is horizontal. 
D) The price elasticity of demand for that product is equal to one.

Question 20

The price of a new smartphone falls from $500 to $450.The quantity of smartphones demanded rises from 1500,00 per year to 200,000 per year.Use the midpoint formula to calculate the price elasticity of demand for new smartphones.Is the demand elastic,inelastic,or unit elastic?

Accepted Answer

% change in quantity demanded = [200,000

When measured along a linear downward-sloping demand curve,the price elasticity:

In the long run,the price elasticity of supply is limited because of the principle of diminishing returns.

If the supply curve is relatively steep,then the price elasticity of supply will be:

If the quantity demanded of soda increases by 4% when the price of coffee increases by 16%,the cross-price elasticity of demand between soda and coffee is:

The price elasticity of supply tends to become more elastic in the long run.

The price elasticity of demand for gasoline is 0.8.What must occur to the price of gasoline in order for quantity demanded to rise by 20 percent?

-Refer to Figure 5.3.At point C the price elasticity of demand is 1.Along line segment BC of the demand curve,the demand is:

Recall the illustration regarding antidrug policies and property crimes.What is the connection between antidrug policies and property crimes such as robbery,burglary,and auto theft?

Suppose that the price elasticity of demand for milk is 0.9 and the price elasticity of supply for milk is 1.1,then a 6% increase in the demand for the product can be expected to increase the price by 2.5%.

Suppose the price elasticity of supply for poker chips is .7 and the price decreases by 30%.The quantity supplied will decrease by ________ %.

What does the income elasticity of demand measure? How is it calculated?

What does the price elasticity of supply measure? How is it calculated?

Elasticity of demand is:

Suppose that the price elasticity of demand for an ice cream cone is 1.9.If the local ice cream shop owner wants to increase total revenue,what would you recommend he or she do?

When moving upward the along a liner demand curve,what happens to the price elasticity of the demand?

If the price elasticity of supply of CDs is 0.8,then the supply is inelastic.

Two goods are complements if the:

If the demand for a product is perfectly inelastic,then which of the following is most likely to be true?

The price of a new smartphone falls from $500 to $450.The quantity of smartphones demanded rises from 1500,00 per year to 200,000 per year.Use the midpoint formula to calculate the price elasticity of demand for new smartphones.Is the demand elastic,inelastic,or unit elastic?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

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Exam 5: Elasticity: a Measure of Responsiveness

When measured along a linear downward-sloping demand curve,the price elasticity:

In the long run,the price elasticity of supply is limited because of the principle of diminishing returns.

If the supply curve is relatively steep,then the price elasticity of supply will be:

If the quantity demanded of soda increases by 4% when the price of coffee increases by 16%,the cross-price elasticity of demand between soda and coffee is:

The price elasticity of supply tends to become more elastic in the long run.

The price elasticity of demand for gasoline is 0.8.What must occur to the price of gasoline in order for quantity demanded to rise by 20 percent?

-Refer to Figure 5.3.At point C the price elasticity of demand is 1.Along line segment BC of the demand curve,the demand is:

Recall the illustration regarding antidrug policies and property crimes.What is the connection between antidrug policies and property crimes such as robbery,burglary,and auto theft?

Suppose that the price elasticity of demand for milk is 0.9 and the price elasticity of supply for milk is 1.1,then a 6% increase in the demand for the product can be expected to increase the price by 2.5%.

Suppose the price elasticity of supply for poker chips is .7 and the price decreases by 30%.The quantity supplied will decrease by ________ %.

What does the income elasticity of demand measure? How is it calculated?

What does the price elasticity of supply measure? How is it calculated?

Elasticity of demand is:

Suppose that the price elasticity of demand for an ice cream cone is 1.9.If the local ice cream shop owner wants to increase total revenue,what would you recommend he or she do?

When moving upward the along a liner demand curve,what happens to the price elasticity of the demand?

If the price elasticity of supply of CDs is 0.8,then the supply is inelastic.

Two goods are complements if the:

If the demand for a product is perfectly inelastic,then which of the following is most likely to be true?

The price of a new smartphone falls from $500 to $450.The quantity of smartphones demanded rises from 1500,00 per year to 200,000 per year.Use the midpoint formula to calculate the price elasticity of demand for new smartphones.Is the demand elastic,inelastic,or unit elastic?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters