Question 1

Total revenue falls as the price of a good decreases if the price elasticity of demand is

Accepted Answer

A) Elastic 
B) Inelastic 
C) Unitary elastic 
D) Perfectly inelastic 
A) Elastic 
B) Inelastic 
C) Unitary elastic 
D) Perfectly inelastic

Question 2

Jim saw a decrease in the quantity demanded for his firm's product from 8000 to 6000 units a week when he raised the price of the product from $200 to $250.Based on this information,the demand for Jim's product is

Accepted Answer

A) Elastic 
B) Unitary elastic 
C) Inelastic 
D) Hard to determine 
A) Elastic 
B) Unitary elastic 
C) Inelastic 
D) Hard to determine

Question 3

A price elasticity of demand of 2.3% implies

Accepted Answer

A) Demand is inelastic 
B) Demand is elastic 
C) Demand is unitary elastic 
D) Demand is perfectly elastic 
A) Demand is inelastic 
B) Demand is elastic 
C) Demand is unitary elastic 
D) Demand is perfectly elastic

Question 4

Use the following information to answer the next two questions:
Cigarettes - Price Elasticity of demand = -0.67
Alcohol - Price elasticity of demand=-1.00
Sodas - Price elasticity of demand=-1.28
-Out of the three products,which product has a unitary elastic demand curve?

Accepted Answer

A) Cigarettes 
B) Alcohol 
C) Sodas 
D) None of the above 
A) Cigarettes 
B) Alcohol 
C) Sodas 
D) None of the above

Question 5

If potatoes are inferior goods,which of the following will increase the demand for these goods?

Accepted Answer

A) Increase in the price of a complement 
B) Decrease in income 
C) Decrease in the price of a substitute 
D) Increase in income 
A) Increase in the price of a complement 
B) Decrease in income 
C) Decrease in the price of a substitute 
D) Increase in income

Question 6

In 2011,Netflix raised prices on its DVDs and internet streaming plan.The Reed Hastings,CEO of Netflix,believes

Accepted Answer

A) Netflix is an industry leader thereby making the demand curve inelastic 
B) Netflix is an industry leader thereby making the demand curve elastic 
C) People are willing to pay more for the good 
D) There are many substitutes to Netflix's products 
A) Netflix is an industry leader thereby making the demand curve inelastic 
B) Netflix is an industry leader thereby making the demand curve elastic 
C) People are willing to pay more for the good 
D) There are many substitutes to Netflix's products

Question 7

Which of the following goods have a negative income elasticity of demand?

Accepted Answer

A) Cars 
B) Items from Dollar stores 
C) Shoes 
D) Bread 
A) Cars 
B) Items from Dollar stores 
C) Shoes 
D) Bread

Question 8

In general,the larger the price elasticity:

Accepted Answer

A) the smaller the responsiveness of price to changes in quantity. 
B) the smaller the responsiveness of quantity to changes in price. 
C) the larger the responsiveness of price to changes in quantity. 
D) the larger the responsiveness of quantity to changes in price. 
A) the smaller the responsiveness of price to changes in quantity. 
B) the smaller the responsiveness of quantity to changes in price. 
C) the larger the responsiveness of price to changes in quantity. 
D) the larger the responsiveness of quantity to changes in price.

Question 9

For complements,cross price elasticity of demand is:

Accepted Answer

A) Negative 
B) Positive 
C) between zero and one only 
D) zero. 
A) Negative 
B) Positive 
C) between zero and one only 
D) zero.

Question 10

A demand for a product is more elastic

Accepted Answer

A) When it has few substitutes 
B) In the long-run 
C) When the expenditure on the product represent a small portion of the budget 
D) When the product is broadly defined 
A) When it has few substitutes 
B) In the long-run 
C) When the expenditure on the product represent a small portion of the budget 
D) When the product is broadly defined

Total revenue falls as the price of a good decreases if the price elasticity of demand is

Jim saw a decrease in the quantity demanded for his firm's product from 8000 to 6000 units a week when he raised the price of the product from $200 to $250.Based on this information,the demand for Jim's product is

A price elasticity of demand of 2.3% implies

Use the following information to answer the next two questions: Cigarettes - Price Elasticity of demand = -0.67 Alcohol - Price elasticity of demand=-1.00 Sodas - Price elasticity of demand=-1.28 -Out of the three products,which product has a unitary elastic demand curve?

If potatoes are inferior goods,which of the following will increase the demand for these goods?

In 2011,Netflix raised prices on its DVDs and internet streaming plan.The Reed Hastings,CEO of Netflix,believes

Which of the following goods have a negative income elasticity of demand?

In general,the larger the price elasticity:

For complements,cross price elasticity of demand is:

A demand for a product is more elastic

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Muchdecisions

Investment Decisions: Look Ahead and Reason Back

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long-Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination Indirect Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

Exam 6: Simple Pricing

Total revenue falls as the price of a good decreases if the price elasticity of demand is

Jim saw a decrease in the quantity demanded for his firm's product from 8000 to 6000 units a week when he raised the price of the product from $200 to $250.Based on this information,the demand for Jim's product is

A price elasticity of demand of 2.3% implies

Use the following information to answer the next two questions: Cigarettes - Price Elasticity of demand = -0.67 Alcohol - Price elasticity of demand=-1.00 Sodas - Price elasticity of demand=-1.28 -Out of the three products,which product has a unitary elastic demand curve?

If potatoes are inferior goods,which of the following will increase the demand for these goods?

In 2011,Netflix raised prices on its DVDs and internet streaming plan.The Reed Hastings,CEO of Netflix,believes

Which of the following goods have a negative income elasticity of demand?

In general,the larger the price elasticity:

For complements,cross price elasticity of demand is:

A demand for a product is more elastic

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Muchdecisions

Investment Decisions: Look Ahead and Reason Back

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long-Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination Indirect Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters