Question 1

Demand is elastic if

Accepted Answer

A)  consumers respond strongly to changes in the product's price. 
B)  a large percentage change in price brings about a small percentage change in quantity demanded. 
C)  a small percentage change in price brings about a small percentage change in quantity demanded. 
D)  the quantity demanded is not responsive to price changes. 
E)  the demand curve is vertical. 
A)  consumers respond strongly to changes in the product's price. 
B)  a large percentage change in price brings about a small percentage change in quantity demanded. 
C)  a small percentage change in price brings about a small percentage change in quantity demanded. 
D)  the quantity demanded is not responsive to price changes. 
E)  the demand curve is vertical.

Question 2

Pete feeds his dog 100 percent more Pup-Peronis when Zuke's treats increase in price by 50 percent.For Pete,Pup-Peronis and Zuke's are ________ and the cross-price elasticity of demand is ________.

Accepted Answer

A)  complements; -1/2 
B)  substitutes; 2 
C)  substitutes; -2 
D)  complements; 2 
E)  substitutes; 1/2 
A)  complements; -1/2 
B)  substitutes; 2 
C)  substitutes; -2 
D)  complements; 2 
E)  substitutes; 1/2

Question 3

If a firm supplies 200 units at a price of $50 and 100 units at a price of $40,using the midpoint method,what is the price elasticity of supply?

Accepted Answer

A)  0.33 
B)  1.00 
C)  3.00 
D)  5.00 
E)  8.50 
A)  0.33 
B)  1.00 
C)  3.00 
D)  5.00 
E)  8.50

Question 4

Goods are ________ when the income elasticity of demand is positive.

Accepted Answer

A)  complements 
B)  elastic 
C)  inferior 
D)  substitutes 
E)  normal 
A)  complements 
B)  elastic 
C)  inferior 
D)  substitutes 
E)  normal

Question 5

Anna owns the Sweet Alps Chocolate store.She charges $10 per pound for her hand made chocolate.You,the economist,have calculated the elasticity of demand for chocolate in her town to be 2.5.If she wants to increase her total revenue,what advice will you give her?

Accepted Answer

You should tell her to lower h

Question 6

If a 10 percent price increase generates a 10 percent decrease in quantity demanded,then demand is

Accepted Answer

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

Question 7

The price elasticity of demand for Red Delicious apples,a certain type of apple,is likely

Accepted Answer

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

Question 8

The figure above shows the supply curve for roses.
-In the figure above,at the point where the price is $50 per bunch,the price elasticity of supply is

Accepted Answer

A)  2.14. 
B)  0.47. 
C)  1. 
D)  3. 
E)  0.33. 
A)  2.14. 
B)  0.47. 
C)  1. 
D)  3. 
E)  0.33.

Question 9

Jess owns a sandwich shop.The price of a sandwich recently increased from $5 to $7.Jess responded by increasing the quantity of sandwiches she supplied from 70 to 90 per day.Using the midpoint method,Jess's price elasticity of supply is equal to

Accepted Answer

A)  1.33. 
B)  0.75. 
C)  3.00. 
D)  4.00. 
E)  1.50. 
A)  1.33. 
B)  0.75. 
C)  3.00. 
D)  4.00. 
E)  1.50.

Question 10

The price elasticity of supply measures

Accepted Answer

A)  the percentage change in supply from a percentage change in demand. 
B)  the extent to which the quantity supplied of a good changes when the price of a good changes, other things remaining the same. 
C)  the slope of the supply curve. 
D)  how the equilibrium price changes in response to a change in the equilibrium quantity supplied. 
E)  Both answers B and C are correct. 
A)  the percentage change in supply from a percentage change in demand. 
B)  the extent to which the quantity supplied of a good changes when the price of a good changes, other things remaining the same. 
C)  the slope of the supply curve. 
D)  how the equilibrium price changes in response to a change in the equilibrium quantity supplied. 
E)  Both answers B and C are correct.

Question 11

-Using the data in the table above,when the price of a skirt rises from $20 to $35,what is the price elasticity of demand? (Use the midpoint method.)

Accepted Answer

A)  0.33 
B)  0.25 
C)  1.00 
D)  1.33 
E)  3.00 
A)  0.33 
B)  0.25 
C)  1.00 
D)  1.33 
E)  3.00

Question 12

Moving downward along a linear (straight-line)downward-sloping demand curve,the

Accepted Answer

A)  price elasticity of demand does not change. 
B)  quantity demanded decreases. 
C)  demand becomes more elastic. 
D)  demand becomes less elastic. 
E)  total revenue never changes. 
A)  price elasticity of demand does not change. 
B)  quantity demanded decreases. 
C)  demand becomes more elastic. 
D)  demand becomes less elastic. 
E)  total revenue never changes.

Question 13

Using the midpoint method,if the price of an airline ticket from Orlando to Pittsburgh falls from $275 to $238,the percentage change in price is

Accepted Answer

A)  1442 percent. 
B)  14.42 percent. 
C)  15.54 percent. 
D)  13.45 percent. 
E)  68.00 percent. 
A)  1442 percent. 
B)  14.42 percent. 
C)  15.54 percent. 
D)  13.45 percent. 
E)  68.00 percent.

Question 14

Which is larger: The price elasticity of demand for food or the price elasticity of demand for oranges? Why?

Accepted Answer

The price elasticity of demand for orang

Question 15

-The figure above shows the supply curve for a good with a

Accepted Answer

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

Question 16

A 10 percent increase in income brings about a 15 percent decrease in the demand for a good.What is the income elasticity of demand and is the good a normal good or an inferior good?

Accepted Answer

The income elasticit

Question 17

People eat at restaurants less often when their incomes fall because of a recession.Eating at restaurants must be

Accepted Answer

A)  an inferior good. 
B)  a normal good. 
C)  a complement to other goods. 
D)  a substitute for other goods. 
E)  an inelastic good. 
A)  an inferior good. 
B)  a normal good. 
C)  a complement to other goods. 
D)  a substitute for other goods. 
E)  an inelastic good.

Question 18

Joe receives a 20 percent increase in his income from his part time job and as a consequence decreases his consumption of Ramen noodles by 10 percent.Hence to Joe,Ramen noodles are

Accepted Answer

A)  a normal good with a price elasticity of demand of 0.5. 
B)  a substitute good with a cross elasticity of 0.5. 
C)  a good with a price elasticity of supply of -0.5. 
D)  an inferior good with an income elasticity of -0.5. 
E)  an inferior good with an income elasticity of -2.0. 
A)  a normal good with a price elasticity of demand of 0.5. 
B)  a substitute good with a cross elasticity of 0.5. 
C)  a good with a price elasticity of supply of -0.5. 
D)  an inferior good with an income elasticity of -0.5. 
E)  an inferior good with an income elasticity of -2.0.

Question 19

-In the figure above,if the price falls from $8 to $7 demand is

Accepted Answer

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

Question 20

List factors that increase the price elasticity of supply.

Accepted Answer

Factors that increase the price elastici

Demand is elastic if

Pete feeds his dog 100 percent more Pup-Peronis when Zuke's treats increase in price by 50 percent.For Pete,Pup-Peronis and Zuke's are and the cross-price elasticity of demand is .

If a firm supplies 200 units at a price of $50 and 100 units at a price of $40,using the midpoint method,what is the price elasticity of supply?

Goods are ________ when the income elasticity of demand is positive.

Anna owns the Sweet Alps Chocolate store.She charges $10 per pound for her hand made chocolate.You,the economist,have calculated the elasticity of demand for chocolate in her town to be 2.5.If she wants to increase her total revenue,what advice will you give her?

If a 10 percent price increase generates a 10 percent decrease in quantity demanded,then demand is

The price elasticity of demand for Red Delicious apples,a certain type of apple,is likely

The figure above shows the supply curve for roses. -In the figure above,at the point where the price is $50 per bunch,the price elasticity of supply is

Jess owns a sandwich shop.The price of a sandwich recently increased from $5 to $7.Jess responded by increasing the quantity of sandwiches she supplied from 70 to 90 per day.Using the midpoint method,Jess's price elasticity of supply is equal to

The price elasticity of supply measures

-Using the data in the table above,when the price of a skirt rises from $20 to $35,what is the price elasticity of demand? (Use the midpoint method.)

Moving downward along a linear (straight-line)downward-sloping demand curve,the

Using the midpoint method,if the price of an airline ticket from Orlando to Pittsburgh falls from $275 to $238,the percentage change in price is

Which is larger: The price elasticity of demand for food or the price elasticity of demand for oranges? Why?

-The figure above shows the supply curve for a good with a

A 10 percent increase in income brings about a 15 percent decrease in the demand for a good.What is the income elasticity of demand and is the good a normal good or an inferior good?

People eat at restaurants less often when their incomes fall because of a recession.Eating at restaurants must be

Joe receives a 20 percent increase in his income from his part time job and as a consequence decreases his consumption of Ramen noodles by 10 percent.Hence to Joe,Ramen noodles are

-In the figure above,if the price falls from $8 to $7 demand is

List factors that increase the price elasticity of supply.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 5: Elasticities of Demand and Supply

Demand is elastic if

Pete feeds his dog 100 percent more Pup-Peronis when Zuke's treats increase in price by 50 percent.For Pete,Pup-Peronis and Zuke's are ________ and the cross-price elasticity of demand is ________.

If a firm supplies 200 units at a price of $50 and 100 units at a price of $40,using the midpoint method,what is the price elasticity of supply?

Goods are ________ when the income elasticity of demand is positive.

Anna owns the Sweet Alps Chocolate store.She charges $10 per pound for her hand made chocolate.You,the economist,have calculated the elasticity of demand for chocolate in her town to be 2.5.If she wants to increase her total revenue,what advice will you give her?

If a 10 percent price increase generates a 10 percent decrease in quantity demanded,then demand is

The price elasticity of demand for Red Delicious apples,a certain type of apple,is likely

The figure above shows the supply curve for roses. -In the figure above,at the point where the price is $50 per bunch,the price elasticity of supply is

Jess owns a sandwich shop.The price of a sandwich recently increased from $5 to $7.Jess responded by increasing the quantity of sandwiches she supplied from 70 to 90 per day.Using the midpoint method,Jess's price elasticity of supply is equal to

The price elasticity of supply measures

-Using the data in the table above,when the price of a skirt rises from $20 to $35,what is the price elasticity of demand? (Use the midpoint method.)

Moving downward along a linear (straight-line)downward-sloping demand curve,the

Using the midpoint method,if the price of an airline ticket from Orlando to Pittsburgh falls from $275 to $238,the percentage change in price is

Which is larger: The price elasticity of demand for food or the price elasticity of demand for oranges? Why?

-The figure above shows the supply curve for a good with a

A 10 percent increase in income brings about a 15 percent decrease in the demand for a good.What is the income elasticity of demand and is the good a normal good or an inferior good?

People eat at restaurants less often when their incomes fall because of a recession.Eating at restaurants must be

Joe receives a 20 percent increase in his income from his part time job and as a consequence decreases his consumption of Ramen noodles by 10 percent.Hence to Joe,Ramen noodles are

-In the figure above,if the price falls from $8 to $7 demand is

List factors that increase the price elasticity of supply.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Pete feeds his dog 100 percent more Pup-Peronis when Zuke's treats increase in price by 50 percent.For Pete,Pup-Peronis and Zuke's are and the cross-price elasticity of demand is .