Question 1

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 2

A firm raises the price it charges. The firm's total revenue does not change. What can we conclude about the price elasticity of demand?

Accepted Answer

A) Demand is elastic. 
B) Demand is unit elastic. 
C) Demand is inelastic. 
D) Demand is perfectly elastic. 
E) Not enough information is given to conclude anything about price elasticity of demand. 
A) Demand is elastic. 
B) Demand is unit elastic. 
C) Demand is inelastic. 
D) Demand is perfectly elastic. 
E) Not enough information is given to conclude anything about price elasticity of demand.

Question 3

The figure above shows the demand curve for Starbucks latte.
-In the figure above, the demand is inelastic in the range of prices between

Accepted Answer

A) $3.50 and $4.50 per cup. 
B) $2.50 and $3.50 per cup. 
C) $1.00 and $2.00 per cup. 
D) $2.25 and $4.50 per cup. 
E) $2.75 and $3.75 per cup. 
A) $3.50 and $4.50 per cup. 
B) $2.50 and $3.50 per cup. 
C) $1.00 and $2.00 per cup. 
D) $2.25 and $4.50 per cup. 
E) $2.75 and $3.75 per cup.

Question 4

Of the following, which good has the most elastic demand?

Accepted Answer

A) food 
B) breakfast food 
C) cereal 
D) Post Raisin Bran 
E) Post Raisin Brand purchased at a Safeway grocery store 
A) food 
B) breakfast food 
C) cereal 
D) Post Raisin Bran 
E) Post Raisin Brand purchased at a Safeway grocery store

Question 5

The elasticity of demand is used to

Accepted Answer

A) determine if consumers will or will not buy a product. 
B) measure how responsive consumers are to a change in price. 
C) determine in what direction the demand curve shifts if income changes. 
D) find the market equilibrium. 
E) determine if a change in price results in a shortage or a surplus. 
A) determine if consumers will or will not buy a product. 
B) measure how responsive consumers are to a change in price. 
C) determine in what direction the demand curve shifts if income changes. 
D) find the market equilibrium. 
E) determine if a change in price results in a shortage or a surplus.

Question 6

If a product is an inferior good, then its income elasticity of demand is

Accepted Answer

A) zero. 
B) positive. 
C) negative. 
D) indeterminate. 
E) undefined. 
A) zero. 
B) positive. 
C) negative. 
D) indeterminate. 
E) undefined.

Question 7

If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded, then demand is

Accepted Answer

A) elastic and total revenue decreases. 
B) elastic and total revenue increases. 
C) inelastic and total revenue decreases. 
D) elastic, but we cannot tell what happens to total revenue without more information. 
E) total revenue decreases but we cannot tell if the demand is elastic or inelastic without more information. 
A) elastic and total revenue decreases. 
B) elastic and total revenue increases. 
C) inelastic and total revenue decreases. 
D) elastic, but we cannot tell what happens to total revenue without more information. 
E) total revenue decreases but we cannot tell if the demand is elastic or inelastic without more information.

Question 8

As more time passes, the price elasticity of gasoline

Accepted Answer

A) increases. 
B) decreases. 
C) stays the same. 
D) becomes perfectly inelastic. 
E) becomes perfectly elastic. 
A) increases. 
B) decreases. 
C) stays the same. 
D) becomes perfectly inelastic. 
E) becomes perfectly elastic.

Question 9

-In the figure above, what is the total revenue at point A?

Accepted Answer

A) $20 
B) $150 
C) $170 
D) $3,000 
E) 150 quantity units 
A) $20 
B) $150 
C) $170 
D) $3,000 
E) 150 quantity units

Question 10

You are the brand manager of Crest toothpaste and you observe that when you increase the price of Crest, your total revenue increases. How is that possible?

Accepted Answer

The demand for Crest toothpast

Question 11

Based on the data in the table above, ice cream and cake are ________ goods.

Accepted Answer

A) inferior 
B) normal 
C) substitute 
D) complementary 
E) Both answers B and D are correct. 
A) inferior 
B) normal 
C) substitute 
D) complementary 
E) Both answers B and D are correct.

Question 12

The demand for oil is inelastic. So, does an increase in the price of oil mean an increase in total revenue or a decrease in total revenue for oil producers?

Accepted Answer

Because the demand is inelasti

Question 13

If the price elasticity of demand for a product is 2.5, then a price increase of 1.5 percent decreases the quantity demanded by

Accepted Answer

A) 1.55 percent. 
B) 3.50 percent. 
C) 5.00 percent. 
D) 3.75 percent. 
E) 1.00 percent. 
A) 1.55 percent. 
B) 3.50 percent. 
C) 5.00 percent. 
D) 3.75 percent. 
E) 1.00 percent.

Question 14

Suppose the demand for rescue services in our national parks is perfectly inelastic. This fact would mean that a 31 percent increase in rescue fees leads to

Accepted Answer

A) a 31 percent decrease in the quantity demanded. 
B) a 31 percent increase in demand. 
C) a 31 percent decrease in demand. 
D) no change in the quantity demanded. 
E) a decrease in the quantity demanded to 0 rescues. 
A) a 31 percent decrease in the quantity demanded. 
B) a 31 percent increase in demand. 
C) a 31 percent decrease in demand. 
D) no change in the quantity demanded. 
E) a decrease in the quantity demanded to 0 rescues.

Question 15

If the quantity supplied increases by 8 percent when the price rises by 2 percent, the price elasticity of supply is ________ .

Accepted Answer

A) 10.0 
B) 6.0 
C) 0.25 
D) 16.0 
E) 4.0 
A) 10.0 
B) 6.0 
C) 0.25 
D) 16.0 
E) 4.0

Question 16

-In the figure above, using the midpoint method, what is the price elasticity of demand between points A and B?

Accepted Answer

A) 0.05 
B) 0.13 
C) 0.43 
D) 1.00 
E) 2.33 
A) 0.05 
B) 0.13 
C) 0.43 
D) 1.00 
E) 2.33

Question 17

If a product is a normal good, then its income elasticity of demand is

Accepted Answer

A) zero. 
B) positive. 
C) negative. 
D) indeterminate. 
E) greater than 1. 
A) zero. 
B) positive. 
C) negative. 
D) indeterminate. 
E) greater than 1.

Question 18

-The demand curve shown in the figure above is ________ over the price range from $0.90 to $1.10 per pack.

Accepted Answer

A) perfectly elastic 
B) perfectly inelastic 
C) unit elastic 
D) elastic but not perfectly elastic 
E) inelastic but not perfectly inelastic 
A) perfectly elastic 
B) perfectly inelastic 
C) unit elastic 
D) elastic but not perfectly elastic 
E) inelastic but not perfectly inelastic

Question 19

When the percentage change in the quantity demanded is less than the percentage change in price, then demand is

Accepted Answer

A) inelastic. 
B) unit elastic. 
C) elastic. 
D) irrelevant. 
E) undefined. 
A) inelastic. 
B) unit elastic. 
C) elastic. 
D) irrelevant. 
E) undefined.

Question 20

-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.

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?

A firm raises the price it charges. The firm's total revenue does not change. What can we conclude about the price elasticity of demand?

The figure above shows the demand curve for Starbucks latte. -In the figure above, the demand is inelastic in the range of prices between

Of the following, which good has the most elastic demand?

The elasticity of demand is used to

If a product is an inferior good, then its income elasticity of demand is

If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded, then demand is

As more time passes, the price elasticity of gasoline

-In the figure above, what is the total revenue at point A?

You are the brand manager of Crest toothpaste and you observe that when you increase the price of Crest, your total revenue increases. How is that possible?

Based on the data in the table above, ice cream and cake are ________ goods.

The demand for oil is inelastic. So, does an increase in the price of oil mean an increase in total revenue or a decrease in total revenue for oil producers?

If the price elasticity of demand for a product is 2.5, then a price increase of 1.5 percent decreases the quantity demanded by

Suppose the demand for rescue services in our national parks is perfectly inelastic. This fact would mean that a 31 percent increase in rescue fees leads to

If the quantity supplied increases by 8 percent when the price rises by 2 percent, the price elasticity of supply is ________ .

-In the figure above, using the midpoint method, what is the price elasticity of demand between points A and B?

If a product is a normal good, then its income elasticity of demand is

-The demand curve shown in the figure above is ________ over the price range from $0.90 to $1.10 per pack.

When the percentage change in the quantity demanded is less than the percentage change in price, then demand is

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

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 5: Elasticities of Demand and Supply

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?

A firm raises the price it charges. The firm's total revenue does not change. What can we conclude about the price elasticity of demand?

The figure above shows the demand curve for Starbucks latte. -In the figure above, the demand is inelastic in the range of prices between

Of the following, which good has the most elastic demand?

The elasticity of demand is used to

If a product is an inferior good, then its income elasticity of demand is

If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded, then demand is

As more time passes, the price elasticity of gasoline

-In the figure above, what is the total revenue at point A?

You are the brand manager of Crest toothpaste and you observe that when you increase the price of Crest, your total revenue increases. How is that possible?

Based on the data in the table above, ice cream and cake are ________ goods.

The demand for oil is inelastic. So, does an increase in the price of oil mean an increase in total revenue or a decrease in total revenue for oil producers?

If the price elasticity of demand for a product is 2.5, then a price increase of 1.5 percent decreases the quantity demanded by

Suppose the demand for rescue services in our national parks is perfectly inelastic. This fact would mean that a 31 percent increase in rescue fees leads to

If the quantity supplied increases by 8 percent when the price rises by 2 percent, the price elasticity of supply is ________ .

-In the figure above, using the midpoint method, what is the price elasticity of demand between points A and B?

If a product is a normal good, then its income elasticity of demand is

-The demand curve shown in the figure above is ________ over the price range from $0.90 to $1.10 per pack.

When the percentage change in the quantity demanded is less than the percentage change in price, then demand is

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

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters