Question 1

If the price elasticity of demand for peanuts is 0.4,then the demand is inelastic.

Accepted Answer

A) True 
 B)False

Question 2

What does the price elasticity of supply measure?

Accepted Answer

A)  the responsiveness of the quantity supplied to changes in price 
B)  the responsiveness of the quantity demanded to the change in price 
C)  the responsiveness of total revenue to the change in price 
D)  none of the above 
A)  the responsiveness of the quantity supplied to changes in price 
B)  the responsiveness of the quantity demanded to the change in price 
C)  the responsiveness of total revenue to the change in price 
D)  none of the above

Question 3

The price elasticity of demand for new stereos is 2.Suppose a stereo store wishes to increase its sales by 15 percent.What should the firm do?

Accepted Answer

[15]/[percentage cha

Question 4

-Refer to Figure 5.6.The demand for milkshakes is unitary elastic at Point C.If the price of a milkshake is reduced from P₃ to P₄,total revenue

Accepted Answer

A)  will increase. 
B)  will decrease. 
C)  will remain constant. 
D)  could either increase or decrease. 
A)  will increase. 
B)  will decrease. 
C)  will remain constant. 
D)  could either increase or decrease.

Question 5

The price of cabbage rises from $0.20 per pound to $0.30 per pound.The quantity of cabbage demanded falls from 800 pounds per week to 600 pounds per week.Use the initial-value formula to calculate the price elasticity of demand for cabbage.Is the demand elastic,inelastic,or unit elastic?

Accepted Answer

percentage change in quantity demanded =

Question 6

If the price elasticity of demand is exactly 1,then a decrease in the price will result in an increase in total revenue.

Accepted Answer

A) True 
 B)False

Question 7

Goods for which the price elasticity of demand is relatively inelastic

Accepted Answer

A)  have many substitutes. 
B)  are purchased by low-income households. 
C)  tend to be luxury items. 
D)  have few substitutes. 
A)  have many substitutes. 
B)  are purchased by low-income households. 
C)  tend to be luxury items. 
D)  have few substitutes.

Question 8

The price elasticity of demand for coffee is 2.2 and the price elasticity of supply for coffee is 1.8.If demand increases by 20%,the percentage change in the equilibrium price of coffee will

Accepted Answer

A)  rise by 5%. 
B)  fall by 5%. 
C)  rise by 0.2%. 
D)  fall by 0.2%. 
A)  rise by 5%. 
B)  fall by 5%. 
C)  rise by 0.2%. 
D)  fall by 0.2%.

Question 9

The price elasticity of demand for tomatoes is 1.2 during the summer.If a drought causes the price of tomatoes to increase 15%,farmers can expect quantity demanded to

Accepted Answer

A)  decrease by 18%. 
B)  increase by 18%. 
C)  decrease by 12.5%. 
D)  increase by 12.5%. 
A)  decrease by 18%. 
B)  increase by 18%. 
C)  decrease by 12.5%. 
D)  increase by 12.5%.

Question 10

If the price elasticity of demand is 2 then a 4% increase in the price of the product can be expected to reduce quantity demanded by 8%.

Accepted Answer

A) True 
 B)False

Question 11

Suppose that a local dry cleaner shop faces a demand curve that is liner and that the current price for its garments is set at a point where the price elasticity of demand is 1.7.If the local dry cleaner shop increases the price per garment,demand becomes ________ elastic and total revenue ________.

Accepted Answer

A)  less; decreases 
B)  more; decreases 
C)  less; increases 
D)  more; increases 
A)  less; decreases 
B)  more; decreases 
C)  less; increases 
D)  more; increases

Question 12

Is demand more elastic in the short run or the long run? Why?

Accepted Answer

Demand is more elastic in the

Question 13

Which of the following is likely to have an elastic demand?

Accepted Answer

A)  salt 
B)  textbooks 
C)  coffee 
D)  movies 
A)  salt 
B)  textbooks 
C)  coffee 
D)  movies

Question 14

If the price of organic milk increases by 10% and quantity demanded falls by 20%,then the price elasticity of demand for organic milk is 2.

Accepted Answer

A) True 
 B)False

Question 15

A medicine such as insulin would most likely have a price elasticity of demand

Accepted Answer

A)  equal to one. 
B)  close to zero. 
C)  greater than one in absolute value. 
D)  close to infinity. 
A)  equal to one. 
B)  close to zero. 
C)  greater than one in absolute value. 
D)  close to infinity.

Question 16

How does one determine whether supply is elastic or inelastic?

Accepted Answer

If the price elasticity of sup

Question 17

Suppose that the price elasticity of demand for museum tickets is equal to 1.8.If the price of a museum ticket rises by 30 percent,what will happen to quantity demanded?

Accepted Answer

[percentage change in quantity

Question 18

Another word for elasticity would be flexibility.

Accepted Answer

A) True 
 B)False

Question 19

The price elasticity of supply for hotdogs is 1.2 and the price elasticity of demand for hotdogs is 2.0.If the demand for hotdogs rises by 20%,what will happen to the price of hotdogs?

Accepted Answer

percentage change in price = [

Question 20

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

Accepted Answer

The price elasticity of supply measures

If the price elasticity of demand for peanuts is 0.4,then the demand is inelastic.

What does the price elasticity of supply measure?

The price elasticity of demand for new stereos is 2.Suppose a stereo store wishes to increase its sales by 15 percent.What should the firm do?

-Refer to Figure 5.6.The demand for milkshakes is unitary elastic at Point C.If the price of a milkshake is reduced from P₃ to P₄,total revenue

The price of cabbage rises from $0.20 per pound to $0.30 per pound.The quantity of cabbage demanded falls from 800 pounds per week to 600 pounds per week.Use the initial-value formula to calculate the price elasticity of demand for cabbage.Is the demand elastic,inelastic,or unit elastic?

If the price elasticity of demand is exactly 1,then a decrease in the price will result in an increase in total revenue.

Goods for which the price elasticity of demand is relatively inelastic

The price elasticity of demand for coffee is 2.2 and the price elasticity of supply for coffee is 1.8.If demand increases by 20%,the percentage change in the equilibrium price of coffee will

The price elasticity of demand for tomatoes is 1.2 during the summer.If a drought causes the price of tomatoes to increase 15%,farmers can expect quantity demanded to

If the price elasticity of demand is 2 then a 4% increase in the price of the product can be expected to reduce quantity demanded by 8%.

Suppose that a local dry cleaner shop faces a demand curve that is liner and that the current price for its garments is set at a point where the price elasticity of demand is 1.7.If the local dry cleaner shop increases the price per garment,demand becomes elastic and total revenue .

Is demand more elastic in the short run or the long run? Why?

Which of the following is likely to have an elastic demand?

If the price of organic milk increases by 10% and quantity demanded falls by 20%,then the price elasticity of demand for organic milk is 2.

A medicine such as insulin would most likely have a price elasticity of demand

How does one determine whether supply is elastic or inelastic?

Suppose that the price elasticity of demand for museum tickets is equal to 1.8.If the price of a museum ticket rises by 30 percent,what will happen to quantity demanded?

Another word for elasticity would be flexibility.

The price elasticity of supply for hotdogs is 1.2 and the price elasticity of demand for hotdogs is 2.0.If the demand for hotdogs rises by 20%,what will happen to the price of hotdogs?

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

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

Exam 5: Elasticity: a Measure of Responsiveness

If the price elasticity of demand for peanuts is 0.4,then the demand is inelastic.

What does the price elasticity of supply measure?

The price elasticity of demand for new stereos is 2.Suppose a stereo store wishes to increase its sales by 15 percent.What should the firm do?

-Refer to Figure 5.6.The demand for milkshakes is unitary elastic at Point C.If the price of a milkshake is reduced from P₃ to P₄,total revenue

The price of cabbage rises from $0.20 per pound to $0.30 per pound.The quantity of cabbage demanded falls from 800 pounds per week to 600 pounds per week.Use the initial-value formula to calculate the price elasticity of demand for cabbage.Is the demand elastic,inelastic,or unit elastic?

If the price elasticity of demand is exactly 1,then a decrease in the price will result in an increase in total revenue.

Goods for which the price elasticity of demand is relatively inelastic

The price elasticity of demand for coffee is 2.2 and the price elasticity of supply for coffee is 1.8.If demand increases by 20%,the percentage change in the equilibrium price of coffee will

The price elasticity of demand for tomatoes is 1.2 during the summer.If a drought causes the price of tomatoes to increase 15%,farmers can expect quantity demanded to

If the price elasticity of demand is 2 then a 4% increase in the price of the product can be expected to reduce quantity demanded by 8%.

Is demand more elastic in the short run or the long run? Why?

Which of the following is likely to have an elastic demand?

If the price of organic milk increases by 10% and quantity demanded falls by 20%,then the price elasticity of demand for organic milk is 2.

A medicine such as insulin would most likely have a price elasticity of demand

How does one determine whether supply is elastic or inelastic?

Suppose that the price elasticity of demand for museum tickets is equal to 1.8.If the price of a museum ticket rises by 30 percent,what will happen to quantity demanded?

Another word for elasticity would be flexibility.

The price elasticity of supply for hotdogs is 1.2 and the price elasticity of demand for hotdogs is 2.0.If the demand for hotdogs rises by 20%,what will happen to the price of hotdogs?

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

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