Question 1

At the midpoint of a linear,downward-sloping demand curve,the price elasticity of demand is

Accepted Answer

A) greater than one. 
B) equal to one. 
C) less than one but greater than zero. 
D) zero. 
E) infinite. 
A) greater than one. 
B) equal to one. 
C) less than one but greater than zero. 
D) zero. 
E) infinite.

Question 2

When the price of tacos rises 4 percent,the quantity demanded decreases 10 percent.What is the price elasticity of demand for tacos?

Accepted Answer

A) 40.0 
B) 25.0 
C) 0.4 
D) 2.5 
E) 10.0 
A) 40.0 
B) 25.0 
C) 0.4 
D) 2.5 
E) 10.0

Question 3

Which of the following is most likely to have an income elasticity of demand that is less than 1?

Accepted Answer

A) movies 
B) airline travel 
C) foreign travel 
D) food 
E) restaurant meals 
A) movies 
B) airline travel 
C) foreign travel 
D) food 
E) restaurant meals

Question 4

The cross elasticity between computers and software is

Accepted Answer

A) negative because they are substitutes. 
B) positive because they are substitutes. 
C) negative because they are complements. 
D) positive because they are complements. 
E) positive because they are normal goods. 
A) negative because they are substitutes. 
B) positive because they are substitutes. 
C) negative because they are complements. 
D) positive because they are complements. 
E) positive because they are normal goods.

Question 5

When income increases from $20,000 to $30,000 the quantity of inter-city bus trips taken per year decreases from 10 to 8.Hence

Accepted Answer

A) inter-city bus trips are a normal good. 
B) the income elasticity of demand for inter-city bus trips is -1.8. 
C) the income elasticity of demand for inter-city bus trips is -0.56. 
D) Both answers A and B are correct. 
E) Both answers A and C are correct. 
A) inter-city bus trips are a normal good. 
B) the income elasticity of demand for inter-city bus trips is -1.8. 
C) the income elasticity of demand for inter-city bus trips is -0.56. 
D) Both answers A and B are correct. 
E) Both answers A and C are correct.

Question 6

If a lower price for good X increases the demand for good Y,the cross elasticity value for the two goods is

Accepted Answer

A) negative. 
B) equal to zero. 
C) positive and less than one. 
D) positive and greater than one. 
E) possibly negative,positive,or zero,but there is not enough information to decide. 
A) negative. 
B) equal to zero. 
C) positive and less than one. 
D) positive and greater than one. 
E) possibly negative,positive,or zero,but there is not enough information to decide.

Question 7

The demand for a necessity generally is

Accepted Answer

A) very elastic. 
B) infinitely elastic. 
C) unaffected by income. 
D) inelastic. 
E) unit elastic. 
A) very elastic. 
B) infinitely elastic. 
C) unaffected by income. 
D) inelastic. 
E) unit elastic.

Question 8

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 9

-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 10

-The demand curve shown in the figure above reflects demand that is

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 11

The demand for luxury suites at basketball games is more elastic if

Accepted Answer

A) these suites are a necessity. 
B) these suites are a luxury item. 
C) few close substitutes exist for these suites. 
D) basketball fans have little time to look for alternative suites. 
E) poorer fans cannot afford luxury suites. 
A) these suites are a necessity. 
B) these suites are a luxury item. 
C) few close substitutes exist for these suites. 
D) basketball fans have little time to look for alternative suites. 
E) poorer fans cannot afford luxury suites.

Question 12

The cross elasticity of demand for strawberry jelly and grape jelly is likely to be

Accepted Answer

A) positive because they are substitutes. 
B) positive because they are complements. 
C) negative because they are substitutes. 
D) negative because they are complements. 
E) negative because they are inferior goods. 
A) positive because they are substitutes. 
B) positive because they are complements. 
C) negative because they are substitutes. 
D) negative because they are complements. 
E) negative because they are inferior goods.

Question 13

If beef and pork are substitutes for consumers,the cross elasticity of demand between the two products must be

Accepted Answer

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

Question 14

The measure used to determine whether two products are complements or substitutes is called the

Accepted Answer

A) price elasticity of supply. 
B) cross elasticity of demand. 
C) price elasticity of demand. 
D) income elasticity. 
E) substitute elasticity of demand. 
A) price elasticity of supply. 
B) cross elasticity of demand. 
C) price elasticity of demand. 
D) income elasticity. 
E) substitute elasticity of demand.

Question 15

During the winter of 2011-2012,the price of fuel oil increased enormously but the quantity demanded decreased only a little.This response indicates that the demand for fuel oil was

Accepted Answer

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

Question 16

When two goods are related such that an increase in the price of one good decreases the quantity demanded of the other good,these goods are definitely

Accepted Answer

A) normal goods. 
B) luxury goods. 
C) complements. 
D) substitutes. 
E) inferior goods. 
A) normal goods. 
B) luxury goods. 
C) complements. 
D) substitutes. 
E) inferior goods.

Question 17

Pizza Hut lowers the price of its pizza.The price elasticity of demand for Pizza Hut pizza equals 0.3.What happens to the Pizza Hut's total revenue?

Accepted Answer

A) nothing 
B) It increases. 
C) It decreases. 
D) It becomes negative. 
E) It might change,but more information is needed to determine if it increases,decreases,or does not change. 
A) nothing 
B) It increases. 
C) It decreases. 
D) It becomes negative. 
E) It might change,but more information is needed to determine if it increases,decreases,or does not change.

Question 18

Does the fact that the price elasticity of demand for a good is inelastic violate the law of demand?

Accepted Answer

No,if the demand is inelastic,when the p

Question 19

Total revenue equals

Accepted Answer

A) price × quantity sold. 
B) profit - cost. 
C) price. 
D) quantity sold - cost. 
E) cost × price. 
A) price × quantity sold. 
B) profit - cost. 
C) price. 
D) quantity sold - cost. 
E) cost × price.

Question 20

If the price of a a good increases by 10 percent and the quantity supplied increases by 5 percent,then the elasticity of supply is

Accepted Answer

A) greater than one and supply is elastic. 
B) negative and supply is inelastic. 
C) less than one and supply is elastic. 
D) less than one and supply is inelastic. 
E) greater than one and supply is inelastic. 
A) greater than one and supply is elastic. 
B) negative and supply is inelastic. 
C) less than one and supply is elastic. 
D) less than one and supply is inelastic. 
E) greater than one and supply is inelastic.

At the midpoint of a linear,downward-sloping demand curve,the price elasticity of demand is

When the price of tacos rises 4 percent,the quantity demanded decreases 10 percent.What is the price elasticity of demand for tacos?

Which of the following is most likely to have an income elasticity of demand that is less than 1?

The cross elasticity between computers and software is

When income increases from $20,000 to $30,000 the quantity of inter-city bus trips taken per year decreases from 10 to 8.Hence

If a lower price for good X increases the demand for good Y,the cross elasticity value for the two goods is

The demand for a necessity generally 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

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

-The demand curve shown in the figure above reflects demand that is

The demand for luxury suites at basketball games is more elastic if

The cross elasticity of demand for strawberry jelly and grape jelly is likely to be

If beef and pork are substitutes for consumers,the cross elasticity of demand between the two products must be

The measure used to determine whether two products are complements or substitutes is called the

During the winter of 2011-2012,the price of fuel oil increased enormously but the quantity demanded decreased only a little.This response indicates that the demand for fuel oil was

When two goods are related such that an increase in the price of one good decreases the quantity demanded of the other good,these goods are definitely

Pizza Hut lowers the price of its pizza.The price elasticity of demand for Pizza Hut pizza equals 0.3.What happens to the Pizza Hut's total revenue?

Does the fact that the price elasticity of demand for a good is inelastic violate the law of demand?

Total revenue equals

If the price of a a good increases by 10 percent and the quantity supplied increases by 5 percent,then the elasticity of supply is

Getting Started

The Usand 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

At the midpoint of a linear,downward-sloping demand curve,the price elasticity of demand is

When the price of tacos rises 4 percent,the quantity demanded decreases 10 percent.What is the price elasticity of demand for tacos?

Which of the following is most likely to have an income elasticity of demand that is less than 1?

The cross elasticity between computers and software is

When income increases from $20,000 to $30,000 the quantity of inter-city bus trips taken per year decreases from 10 to 8.Hence

If a lower price for good X increases the demand for good Y,the cross elasticity value for the two goods is

The demand for a necessity generally 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

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

-The demand curve shown in the figure above reflects demand that is

The demand for luxury suites at basketball games is more elastic if

The cross elasticity of demand for strawberry jelly and grape jelly is likely to be

If beef and pork are substitutes for consumers,the cross elasticity of demand between the two products must be

The measure used to determine whether two products are complements or substitutes is called the

During the winter of 2011-2012,the price of fuel oil increased enormously but the quantity demanded decreased only a little.This response indicates that the demand for fuel oil was

When two goods are related such that an increase in the price of one good decreases the quantity demanded of the other good,these goods are definitely

Pizza Hut lowers the price of its pizza.The price elasticity of demand for Pizza Hut pizza equals 0.3.What happens to the Pizza Hut's total revenue?

Does the fact that the price elasticity of demand for a good is inelastic violate the law of demand?

Total revenue equals

If the price of a a good increases by 10 percent and the quantity supplied increases by 5 percent,then the elasticity of supply is

Getting Started

The Usand 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