Exam 5: Elasticity and Its Applications

Assume that demand increases by 1 percent, the absolute value of price elasticity of demand is 1.0, and price elasticity of supply is 1.0. What is the percentage price change in this case?

(Multiple Choice)

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Question 41

The elasticity of demand measures:

(Multiple Choice)

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Question 42

A good with an absolute value of the price elasticity of demand of 0.5 has:

(Multiple Choice)

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Question 43

If the price of a good increases from $100 to $110 and quantity demanded decreases from 100 units to 90 units, the demand would be classified as unit elastic.

(True/False)

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Question 44

The elasticity of demand for oil is -0.5 and the elasticity of supply is 0.20. If the demand for oil increases 10 percent, what happens to the price of oil?

(Multiple Choice)

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Question 45

Use the following to answer questions: Figure: Gun Market -(Figure: Gun Market) In the gun market shown, the number of guns in the city that is having the gun buyback program is:

(Multiple Choice)

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Question 46

If the demand for a good is inelastic, then:

(Multiple Choice)

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Question 47

Which of the following statements is TRUE?

(Multiple Choice)

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Question 48

Since the demand curve for computer chips is elastic, a decrease in the price of computer chips caused by an increase in productivity will _ revenue for the computer chip industry and make computer chips a _ share of the American economy.

(Multiple Choice)

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Question 49

If the supply of a product is inelastic, a large price increase will:

(Multiple Choice)

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Question 50

Suppose the price of a good rises from $10 to $20 and quantity demanded falls from 500 to 400. If you calculate the elasticity of demand WITHOUT using the midpoint method, the answer would be ___. If you calculate the elasticity of demand WITH the midpoint method, the answer would be _. Economists say ___ when calculating elasticity.

(Multiple Choice)

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Question 51

The fundamental determinant of the elasticity of supply is:

(Multiple Choice)

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Question 52

The elasticity of demand:

(Multiple Choice)

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Question 53

Figure: Elasticity and Quantity Demanded Refer to the figure. An increase in price from $40 to $50 would cause the change in quantity demanded for D₁ to be:

(Multiple Choice)

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Question 54

If two linear supply curves run through a common point, then at any given quantity the curve that is flatter is more elastic.

(True/False)

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Question 55

If the supply of rental housing increases causing its price to fall and apartment dwellers move into bigger apartments that cost the same as their old ones, we can infer that the:

(Multiple Choice)

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Question 56

Use the following to answer questions: Figure: Slave Redemption -(Figure: Slave Redemption) Refer to the figure. Assume the graph illustrates the Sudanese slave trade. When slave redeemers enter the market, the total number of freed slaves is and the net number of freed slaves is .

(Multiple Choice)

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Question 57

If the income elasticity of demand of a good is positive, we can conclude that the good is:

(Multiple Choice)

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Question 58

Both the elasticities of demand and supply tend to be more elastic in the long-run.

(True/False)

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Question 59

A higher income tends to make demand for a given good ______ elastic.

(Multiple Choice)

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Question 60

Showing 41 - 60 of 271

Exam 5: Elasticity and Its Applications

Assume that demand increases by 1 percent, the absolute value of price elasticity of demand is 1.0, and price elasticity of supply is 1.0. What is the percentage price change in this case?

The elasticity of demand measures:

A good with an absolute value of the price elasticity of demand of 0.5 has:

If the price of a good increases from $100 to $110 and quantity demanded decreases from 100 units to 90 units, the demand would be classified as unit elastic.

The elasticity of demand for oil is -0.5 and the elasticity of supply is 0.20. If the demand for oil increases 10 percent, what happens to the price of oil?

Use the following to answer questions: Figure: Gun Market -(Figure: Gun Market) In the gun market shown, the number of guns in the city that is having the gun buyback program is:

If the demand for a good is inelastic, then:

Which of the following statements is TRUE?

Since the demand curve for computer chips is elastic, a decrease in the price of computer chips caused by an increase in productivity will _____ revenue for the computer chip industry and make computer chips a _____ share of the American economy.

If the supply of a product is inelastic, a large price increase will:

The fundamental determinant of the elasticity of supply is:

The elasticity of demand:

Figure: Elasticity and Quantity Demanded Refer to the figure. An increase in price from $40 to $50 would cause the change in quantity demanded for D1 to be:

If two linear supply curves run through a common point, then at any given quantity the curve that is flatter is more elastic.

If the supply of rental housing increases causing its price to fall and apartment dwellers move into bigger apartments that cost the same as their old ones, we can infer that the:

Use the following to answer questions: Figure: Slave Redemption -(Figure: Slave Redemption) Refer to the figure. Assume the graph illustrates the Sudanese slave trade. When slave redeemers enter the market, the total number of freed slaves is ________ and the net number of freed slaves is ________.

If the income elasticity of demand of a good is positive, we can conclude that the good is:

Both the elasticities of demand and supply tend to be more elastic in the long-run.

A higher income tends to make demand for a given good ______ elastic.

The Big Ideas

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Taxes and Subsidies

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters

Since the demand curve for computer chips is elastic, a decrease in the price of computer chips caused by an increase in productivity will _ revenue for the computer chip industry and make computer chips a _ share of the American economy.

Figure: Elasticity and Quantity Demanded Refer to the figure. An increase in price from $40 to $50 would cause the change in quantity demanded for D₁ to be:

Use the following to answer questions: Figure: Slave Redemption -(Figure: Slave Redemption) Refer to the figure. Assume the graph illustrates the Sudanese slave trade. When slave redeemers enter the market, the total number of freed slaves is and the net number of freed slaves is .