Question 1

The figure above shows the demand curve for Starbucks latte.
-In the figure above,the demand is unit elastic

Accepted Answer

A)  at the point where the price is $3.00 per cup. 
B)  at the point where the price is $2.00 per cup. 
C)  at the point where the price is $4.00 per cup. 
D)  at the point where the price is $2.50 per cup. 
E)  at all points along the demand curve. 
A)  at the point where the price is $3.00 per cup. 
B)  at the point where the price is $2.00 per cup. 
C)  at the point where the price is $4.00 per cup. 
D)  at the point where the price is $2.50 per cup. 
E)  at all points along the demand curve.

Question 2

The figure above shows the supply curve for roses.
-Suppose an increase in supply lowers the price from $10 to $8 and increases the quantity demanded from 100 units to 130 units.Using the midpoint method,the elasticity of demand equals

Accepted Answer

A)  1.17. 
B)  0.85. 
C)  0.26. 
D)  1.56. 
E)  None of the above answers is correct. 
A)  1.17. 
B)  0.85. 
C)  0.26. 
D)  1.56. 
E)  None of the above answers is correct.

Question 3

Is supply more elastic or less elastic as more time passes after a price change? Explain your answer.

Accepted Answer

Supply becomes elastic as more time pass

Question 4

"The price elasticity of demand is a measure of how sensitive demanders are to changes in the price of a product." Is this statement true or false?

Accepted Answer

The assertion is true.All elasticities m

Question 5

If a 1 percent increase in the price of X increases the quantity demanded of Y by 2 percent,then X and Y are

Accepted Answer

A)  complements and the cross elasticity of demand equals 2. 
B)  substitutes and the cross elasticity of demand equals 1/2. 
C)  substitutes and the cross elasticity of demand equals 2. 
D)  complements and the income elasticity of demand equals 2. 
E)  normal goods and the income elasticity of demand of each equals 2. 
A)  complements and the cross elasticity of demand equals 2. 
B)  substitutes and the cross elasticity of demand equals 1/2. 
C)  substitutes and the cross elasticity of demand equals 2. 
D)  complements and the income elasticity of demand equals 2. 
E)  normal goods and the income elasticity of demand of each equals 2.

Question 6

-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 7

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 8

If a good has many close substitutes,then its demand is most likely

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  unit elastic. 
D)  perfectly inelastic. 
E)  elastic or inelastic depending on whether the price of the good is increasing or decreasing. 
A)  elastic. 
B)  inelastic. 
C)  unit elastic. 
D)  perfectly inelastic. 
E)  elastic or inelastic depending on whether the price of the good is increasing or decreasing.

Question 9

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

Accepted Answer

A)  a perfectly elastic supply. 
B)  a perfectly inelastic supply. 
C)  an elastic supply. 
D)  an inelastic supply. 
E)  a unit elastic supply. 
A)  a perfectly elastic supply. 
B)  a perfectly inelastic supply. 
C)  an elastic supply. 
D)  an inelastic supply. 
E)  a unit elastic supply.

Question 10

When income increases from $20,000 to $30,000 the number of home delivered pizzas per year increases from 22 to 40.The income elasticity of demand for home delivered pizza equals

Accepted Answer

A)  1.45. 
B)  0.69. 
C)  0.58. 
D)  0.40. 
E)  2.86. 
A)  1.45. 
B)  0.69. 
C)  0.58. 
D)  0.40. 
E)  2.86.

Question 11

"If the price falls and,as a result,the total revenue decreases,demand is elastic." Is the previous assertion correct?

Accepted Answer

No,the assertion is incorrect.

Question 12

If we ignore the negative or positive sign,the midpoint method of calculating a percentage change in price between two points on a demand curve results in

Accepted Answer

A)  a smaller percentage change if the price rises than if it falls. 
B)  the same percentage, regardless of whether the price increases or decreases. 
C)  the price elasticity of demand. 
D)  the price elasticity of supply. 
E)  a higher percentage change if the price rises than if it falls. 
A)  a smaller percentage change if the price rises than if it falls. 
B)  the same percentage, regardless of whether the price increases or decreases. 
C)  the price elasticity of demand. 
D)  the price elasticity of supply. 
E)  a higher percentage change if the price rises than if it falls.

Question 13

The figure above shows the supply curve for roses.
-In the figure above,at the point where the price is $50 per bunch,the price elasticity of supply is

Accepted Answer

A)  2.14. 
B)  0.47. 
C)  1. 
D)  3. 
E)  0.33. 
A)  2.14. 
B)  0.47. 
C)  1. 
D)  3. 
E)  0.33.

Question 14

Many manufactured goods have an ________ supply if production plans have only a short period to change and as time passes and all production adjustments are made,the supply of the good ________ from the initial response.

Accepted Answer

A)  inelastic; increases 
B)  elastic; decreases 
C)  elastic; increases 
D)  inelastic; decreases 
E)  inelastic; does not change 
A)  inelastic; increases 
B)  elastic; decreases 
C)  elastic; increases 
D)  inelastic; decreases 
E)  inelastic; does not change

Question 15

If demand is ________,a price cut ________ the total revenue.

Accepted Answer

A)  elastic; increases 
B)  unit elastic; decreases 
C)  inelastic; increases 
D)  inelastic; does not change 
E)  normal; decreases 
A)  elastic; increases 
B)  unit elastic; decreases 
C)  inelastic; increases 
D)  inelastic; does not change 
E)  normal; decreases

Question 16

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 17

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 18

When the percentage change in the quantity supplied equals the percentage change in price,the supply is

Accepted Answer

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

Question 19

Along a linear (straight-line)downward-sloping demand curve,demand is unit elastic at

Accepted Answer

A)  the highest price. 
B)  the lowest price. 
C)  the midpoint. 
D)  all points on the linear demand curve. 
E)  None of the above because linear demand curves are never unit elastic. 
A)  the highest price. 
B)  the lowest price. 
C)  the midpoint. 
D)  all points on the linear demand curve. 
E)  None of the above because linear demand curves are never unit elastic.

Question 20

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.

The figure above shows the demand curve for Starbucks latte. -In the figure above,the demand is unit elastic

The figure above shows the supply curve for roses. -Suppose an increase in supply lowers the price from $10 to $8 and increases the quantity demanded from 100 units to 130 units.Using the midpoint method,the elasticity of demand equals

Is supply more elastic or less elastic as more time passes after a price change? Explain your answer.

"The price elasticity of demand is a measure of how sensitive demanders are to changes in the price of a product." Is this statement true or false?

If a 1 percent increase in the price of X increases the quantity demanded of Y by 2 percent,then X and Y are

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

Total revenue equals

If a good has many close substitutes,then its demand is most likely

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

When income increases from $20,000 to $30,000 the number of home delivered pizzas per year increases from 22 to 40.The income elasticity of demand for home delivered pizza equals

"If the price falls and,as a result,the total revenue decreases,demand is elastic." Is the previous assertion correct?

If we ignore the negative or positive sign,the midpoint method of calculating a percentage change in price between two points on a demand curve results in

The figure above shows the supply curve for roses. -In the figure above,at the point where the price is $50 per bunch,the price elasticity of supply is

Many manufactured goods have an supply if production plans have only a short period to change and as time passes and all production adjustments are made,the supply of the good from the initial response.

If demand is ,a price cut the total revenue.

The elasticity of demand is used to

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?

When the percentage change in the quantity supplied equals the percentage change in price,the supply is

Along a linear (straight-line)downward-sloping demand curve,demand is unit elastic at

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

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 5: Elasticities of Demand and Supply

The figure above shows the demand curve for Starbucks latte. -In the figure above,the demand is unit elastic

The figure above shows the supply curve for roses. -Suppose an increase in supply lowers the price from $10 to $8 and increases the quantity demanded from 100 units to 130 units.Using the midpoint method,the elasticity of demand equals

Is supply more elastic or less elastic as more time passes after a price change? Explain your answer.

"The price elasticity of demand is a measure of how sensitive demanders are to changes in the price of a product." Is this statement true or false?

If a 1 percent increase in the price of X increases the quantity demanded of Y by 2 percent,then X and Y are

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

Total revenue equals

If a good has many close substitutes,then its demand is most likely

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

When income increases from $20,000 to $30,000 the number of home delivered pizzas per year increases from 22 to 40.The income elasticity of demand for home delivered pizza equals

"If the price falls and,as a result,the total revenue decreases,demand is elastic." Is the previous assertion correct?

If we ignore the negative or positive sign,the midpoint method of calculating a percentage change in price between two points on a demand curve results in

The figure above shows the supply curve for roses. -In the figure above,at the point where the price is $50 per bunch,the price elasticity of supply is

Many manufactured goods have an ________ supply if production plans have only a short period to change and as time passes and all production adjustments are made,the supply of the good ________ from the initial response.

If demand is ________,a price cut ________ the total revenue.

The elasticity of demand is used to

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?

When the percentage change in the quantity supplied equals the percentage change in price,the supply is

Along a linear (straight-line)downward-sloping demand curve,demand is unit elastic at

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

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Many manufactured goods have an supply if production plans have only a short period to change and as time passes and all production adjustments are made,the supply of the good from the initial response.

If demand is ,a price cut the total revenue.