Question 1

Refer to the following graph.   Elasticity is smallest at which point?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 2

Refer to the graph shown. Area C plus area E is:

Accepted Answer

A)  smaller than area A, because demand is elastic between $30 and $40. 
B)  larger than area A, because demand is inelastic between $30 and $40. 
C)  smaller than area A, because demand is inelastic between $30 and $40. 
D)  larger than area A, because demand is elastic between $30 and $40. 
A)  smaller than area A, because demand is elastic between $30 and $40. 
B)  larger than area A, because demand is inelastic between $30 and $40. 
C)  smaller than area A, because demand is inelastic between $30 and $40. 
D)  larger than area A, because demand is elastic between $30 and $40.

Question 3

If the percentage increase in the quantity supplied is smaller than the percentage increase in the price, the supply:

Accepted Answer

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

Question 4

Refer to the graph shown. The approximate elasticity of segment AD is:

Accepted Answer

A)  3/4. 
B)  3. 
C)  4/3. 
D)  4. 
A)  3/4. 
B)  3. 
C)  4/3. 
D)  4.

Question 5

Refer to the graph shown. When price rises by 10 percent, quantity supplied rises by 10 percent. Which curve best demonstrates the elasticity of supply in this example?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 6

When the price of a good increases, what would we expect to see in the markets for its complements?

Accepted Answer

A)  Higher prices and increased sales 
B)  Higher prices and decreased sales 
C)  Lower prices and decreased sales 
D)  Lower prices and increased sales 
A)  Higher prices and increased sales 
B)  Higher prices and decreased sales 
C)  Lower prices and decreased sales 
D)  Lower prices and increased sales

Question 7

Refer to the graph shown. The approximate elasticity of segment AC is:

Accepted Answer

A)  1/3. 
B)  1/2. 
C)  2/3. 
D)  3/2. 
A)  1/3. 
B)  1/2. 
C)  2/3. 
D)  3/2.

Question 8

It is estimated that a 10 percent decline in income will reduce cigarette smoking by 1.4 percent. From this information one can conclude that cigarettes are most likely:

Accepted Answer

A)  a luxury. 
B)  a necessity. 
C)  an inferior good. 
D)  a large portion of one's budget. 
A)  a luxury. 
B)  a necessity. 
C)  an inferior good. 
D)  a large portion of one's budget.

Question 9

Refer to the graph shown. When price rises from $10 to $30:

Accepted Answer

A)  lost revenue is represented by areas B and C and gained revenue is represented by area F. 
B)  gained revenue is represented by areas B and C and lost revenue is represented by area F. 
C)  lost revenue is represented by areas B, C, and D and gained revenue is represented by area A. 
D)  gained revenue is represented by areas B, C, and D and lost revenue is represented by area A. 
A)  lost revenue is represented by areas B and C and gained revenue is represented by area F. 
B)  gained revenue is represented by areas B and C and lost revenue is represented by area F. 
C)  lost revenue is represented by areas B, C, and D and gained revenue is represented by area A. 
D)  gained revenue is represented by areas B, C, and D and lost revenue is represented by area A.

Question 10

GreenTree Corporation sells live Christmas trees. It observes that when it increases the price of Christmas trees by 10 percent, revenue rises by 25 percent. The demand for Christmas trees is:

Accepted Answer

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

Question 11

Refer to the graph shown. When price increases from $4 to $6, total revenue:

Accepted Answer

A)  increases from $200 to $250. 
B)  increases from $150 to $200. 
C)  decreases from $200 to $150. 
D)  decreases from $250 to $200. 
A)  increases from $200 to $250. 
B)  increases from $150 to $200. 
C)  decreases from $200 to $150. 
D)  decreases from $250 to $200.

Question 12

If the quantity of picture frames supplied increases 15 percent when the price goes up 20 percent, the elasticity of supply is:

Accepted Answer

A)  15. 
B)  20. 
C)  1.33. 
D)  0.75. 
A)  15. 
B)  20. 
C)  1.33. 
D)  0.75.

Question 13

Refer to the graph shown. At which point is elasticity zero?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 14

If the quantity of Big Macs demanded falls from 2.0 million to 1.6 million as the price of Whoppers falls from $1.40 to $.80, the cross-price elasticity of demand for Big Macs is:

Accepted Answer

A)  −2.5. 
B)  −0.4. 
C)  2.5 
D)  0.4. 
A)  −2.5. 
B)  −0.4. 
C)  2.5 
D)  0.4.

Question 15

Refer to the graph shown. For which curve does the price elasticity of supply decrease as price increases?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 16

Refer to the graph shown. When price is $40, revenue equals areas:

Accepted Answer

A)  A only. 
B)  A and B only. 
C)  A, B, and D only. 
D)  A, B, C, D, and E. 
A)  A only. 
B)  A and B only. 
C)  A, B, and D only. 
D)  A, B, C, D, and E.

Refer to the following graph. Elasticity is smallest at which point?

Refer to the graph shown. Area C plus area E is:

If the percentage increase in the quantity supplied is smaller than the percentage increase in the price, the supply:

Refer to the graph shown. The approximate elasticity of segment AD is:

Refer to the graph shown. When price rises by 10 percent, quantity supplied rises by 10 percent. Which curve best demonstrates the elasticity of supply in this example?

When the price of a good increases, what would we expect to see in the markets for its complements?

Refer to the graph shown. The approximate elasticity of segment AC is:

It is estimated that a 10 percent decline in income will reduce cigarette smoking by 1.4 percent. From this information one can conclude that cigarettes are most likely:

Refer to the graph shown. When price rises from $10 to $30:

GreenTree Corporation sells live Christmas trees. It observes that when it increases the price of Christmas trees by 10 percent, revenue rises by 25 percent. The demand for Christmas trees is:

Refer to the graph shown. When price increases from $4 to $6, total revenue:

If the quantity of picture frames supplied increases 15 percent when the price goes up 20 percent, the elasticity of supply is:

Refer to the graph shown. At which point is elasticity zero?

If the quantity of Big Macs demanded falls from 2.0 million to 1.6 million as the price of Whoppers falls from $1.40 to $.80, the cross-price elasticity of demand for Big Macs is:

Refer to the graph shown. For which curve does the price elasticity of supply decrease as price increases?

Refer to the graph shown. When price is $40, revenue equals areas:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Filters

Exam 6: Describing Supply and Demand: Elasticities

Refer to the following graph. Elasticity is smallest at which point?

Refer to the graph shown. Area C plus area E is:

If the percentage increase in the quantity supplied is smaller than the percentage increase in the price, the supply:

Refer to the graph shown. The approximate elasticity of segment AD is:

Refer to the graph shown. When price rises by 10 percent, quantity supplied rises by 10 percent. Which curve best demonstrates the elasticity of supply in this example?

When the price of a good increases, what would we expect to see in the markets for its complements?

Refer to the graph shown. The approximate elasticity of segment AC is:

It is estimated that a 10 percent decline in income will reduce cigarette smoking by 1.4 percent. From this information one can conclude that cigarettes are most likely:

Refer to the graph shown. When price rises from $10 to $30:

GreenTree Corporation sells live Christmas trees. It observes that when it increases the price of Christmas trees by 10 percent, revenue rises by 25 percent. The demand for Christmas trees is:

Refer to the graph shown. When price increases from $4 to $6, total revenue:

If the quantity of picture frames supplied increases 15 percent when the price goes up 20 percent, the elasticity of supply is:

Refer to the graph shown. At which point is elasticity zero?

If the quantity of Big Macs demanded falls from 2.0 million to 1.6 million as the price of Whoppers falls from $1.40 to $.80, the cross-price elasticity of demand for Big Macs is:

Refer to the graph shown. For which curve does the price elasticity of supply decrease as price increases?

Refer to the graph shown. When price is $40, revenue equals areas:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Filters