Question 1

Which of the following statements is FALSE?

Accepted Answer

A)   A good with a vertical demand curve has a perfectly inelastic demand.
B)   A good with a straight line, downward sloping demand curve has a demand whose elasticity is constant.
C)   A good with a horizontal demand curve has a perfectly elastic demand.
D)   All of the above statements are false.E) A) and B)
F) All of the above

Question 2

-June makes holiday wreaths and sells them during the holiday season. The figure above shows her supply curve of wreaths per week. Use the midpoint method in this problem.
a) Calculate the percentage change in quantity between points A and B.
b) Calculate the percentage change in price between points A and B.
c) Calculate the price elasticity of supply between points A and B.

Accepted Answer

a) The percentage change in qu...

Question 3

If the demand curve for tacos is a downward sloping straight line, at which of the following prices is the demand the most elastic?

Accepted Answer

A)   a price of $0.50 per taco
B)   a price of $1.00 per taco
C)   a price of $1.50 per taco
D)   There is not enough information given to determine at which price the demand is most elastic.E) B) and D)
F) None of the above

Question 4

If a consumer is relatively insensitive to changes in the price of a good, then the consumer's demand for the good is

Accepted Answer

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

Question 5

If the owner of a local movie theater wanted to increase the theater's total revenue from movie admissions, what should the owner do with ticket prices?

Accepted Answer

If moviegoers' demand is elastic, the ow...

Question 6

When the price of a CD is $13 per CD, 39,000,000 CDs per year are supplied. When the price is $15 per CD, 41,000,000 CDs per year are supplied. What is the elasticity of supply for CDs?

Accepted Answer

A)   2.86
B)   0.35
C)   0.14
D)   0.05E) C) and D)
F) All of the above

Question 7

-The table above gives the demand schedule for snow peas. If the price of snow peas falls from $4.00 to $3.00 a bushel, total revenue will

Accepted Answer

A)   increase because demand is elastic in this range.
B)   decrease because demand is elastic in this range.
C)   increase because demand is inelastic in this range.
D)   decrease because demand is inelastic in this range.E) A) and D)
F) B) and D)

Question 8

Demand is elastic when a price ________ results in total revenue ________.

Accepted Answer

A)   rise, decreasing
B)   fall, decreasing
C)   rise, increasing
D)   fall; remaining constantE) A) and D)
F) None of the above

Question 9

If the elasticity of supply is 4, a 10 percent increase in the price of a good leads to a

Accepted Answer

A)   40 percent increase in the quantity of supply.
B)   4 percent decrease in the quantity demanded.
C)   2.5 percent increase in the quantity supplied.
D)   2.5 percent decrease in the quantity demanded.E) A) and C)
F) B) and C)

Question 10

The demand for bus rides is a downward-sloping straight line demand curve. The price elasticity of demand for bus rides ________.

Accepted Answer

A)   increases as the price of a bus ride falls
B)   decreases as the price of a bus ride falls
C)   is the same no matter what the price of a bus ride
D)   decreases as the price of a bus ride risesE) B) and C)
F) A) and C)

Question 11

The elasticity of demand is constant along a downward sloping straight-line demand curve.

Accepted Answer

A) True 
 B)False

Question 12

If there is an increase in the price of broccoli because of disastrous weather that destroys about half of this year's spinach crop, which of the following could be TRUE?

Accepted Answer

A)   The cross elasticity of demand between spinach and broccoli is negative 1.25.
B)   The demand curve for broccoli has shifted rightward and the cross elasticity of demand between spinach and broccoli is positive.
C)   The demand curve for spinach has shifted to the leftward and the cross elasticity of demand between spinach and broccoli is positive.
D)   The demand curves for spinach and broccoli have become more cross inelastic.E) A) and B)
F) A) and C)

Question 13

Elasticity measures the

Accepted Answer

A)   percentage change in a variable.
B)   slope of a curve.
C)   change in a variable.
D)   responsiveness of a variable to a change in another variable.E) None of the above
F) A) and B)

Question 14

Deb's income has just risen from $950 per week to $1,050 per week. As a result, she decides to increase the number of movies she attends each month by 5 percent. Her demand for movies is

Accepted Answer

A)   represented by a vertical line.
B)   represented by a horizontal line.
C)   income elastic.
D)   income inelastic.E) A) and B)
F) A) and C)

Question 15

-In the figure above, when the price of a disk is $B, total revenue is shown in the graph by area

Accepted Answer

A)   BCF0.
B)   AGF0.
C)   FCDE.
D)   ADE0.E) A) and B)
F) A) and D)

Question 16

Which of the following is likely to have the smallest price elasticity of demand?

Accepted Answer

A)   an automobile
B)   a new automobile
C)   a new Ford automobile
D)   a new Ford MustangE) A) and B)
F) A) and C)

Question 17

If the supply for a good is elastic, that means that when price increases, the

Accepted Answer

A)   supply will increase.
B)   quantity supplied will decrease.
C)   quantity supplied will increase by a smaller percentage than the price increased.
D)   quantity supplied will increase by a greater percentage than the price increased.E) None of the above
F) A) and B)

Question 18

When Monica's Catering lowered the price of catered meals from $60 per person to $20 per person, the quantity demanded doubled from 500 meals to 1,000 meals. You can conclude that the demand for Monica's catered meals over the price range of $20 to $60 is

Accepted Answer

A)   upward sloping.
B)   unit elastic.
C)   elastic.
D)   inelastic.E) C) and D)
F) B) and C)

Question 19

Apple, the consumer electronics giant, on Tuesday rolled out new versions of its popular iPad tablet. Suppose when the price of an iPad decreases by 20 percent, the number of songs downloaded on iTunes increases by 30 percent. Based on this information iTunes are

Accepted Answer

A)   a normal good.
B)   an inferior good.
C)   substitutes for iPads.
D)   complements to iPads.E) B) and C)
F) A) and D)

Question 20

If the price of gasoline rose from $2.85 to $2.95 per gallon, your expenditure on gasoline would increase if your price elasticity of demand for gasoline equals

Accepted Answer

A)   1.25.
B)   1.00.
C)   0.75.
D)   Total revenue would increase at all of the above elasticities.E) A) and B)
F) None of the above

Exam 4: Elasticity

Deb's income has just risen from $950 per week to $1,050 per week. As a result, she decides to increase the number of movies she attends each month by 5 percent. Her demand for movies is

Correct Answer
verified

If the price of gasoline rose from $2.85 to $2.95 per gallon, your expenditure on gasoline would increase if your price elasticity of demand for gasoline equals

Correct Answer
verified

If the elasticity of supply is 4, a 10 percent increase in the price of a good leads to a

Correct Answer
verified

If the owner of a local movie theater wanted to increase the theater's total revenue from movie admissions, what should the owner do with ticket prices?

Correct Answer
verified
If moviegoers' demand is elastic, the ow...
View Answer

When Monica's Catering lowered the price of catered meals from $60 per person to $20 per person, the quantity demanded doubled from 500 meals to 1,000 meals. You can conclude that the demand for Monica's catered meals over the price range of $20 to $60 is

Correct Answer
verified

Demand is elastic when a price results in total revenue .

Correct Answer
verified

Apple, the consumer electronics giant, on Tuesday rolled out new versions of its popular iPad tablet. Suppose when the price of an iPad decreases by 20 percent, the number of songs downloaded on iTunes increases by 30 percent. Based on this information iTunes are

Correct Answer
verified

Elasticity measures the

Correct Answer
verified

The demand for bus rides is a downward-sloping straight line demand curve. The price elasticity of demand for bus rides ________.

Correct Answer
verified

The elasticity of demand is constant along a downward sloping straight-line demand curve.

Correct Answer
verified

-In the figure above, when the price of a disk is $B, total revenue is shown in the graph by area

Correct Answer
verified

When the price of a CD is $13 per CD, 39,000,000 CDs per year are supplied. When the price is $15 per CD, 41,000,000 CDs per year are supplied. What is the elasticity of supply for CDs?

Correct Answer
verified

Correct Answer
verified
a) The percentage change in qu...
View Answer

Which of the following statements is FALSE?

Correct Answer
verified

If a consumer is relatively insensitive to changes in the price of a good, then the consumer's demand for the good is

Correct Answer
verified

If the supply for a good is elastic, that means that when price increases, the

Correct Answer
verified

Which of the following is likely to have the smallest price elasticity of demand?

Correct Answer
verified

-The table above gives the demand schedule for snow peas. If the price of snow peas falls from $4.00 to $3.00 a bushel, total revenue will

Correct Answer
verified

If the demand curve for tacos is a downward sloping straight line, at which of the following prices is the demand the most elastic?

Correct Answer
verified

If there is an increase in the price of broccoli because of disastrous weather that destroys about half of this year's spinach crop, which of the following could be TRUE?

Correct Answer
verified

Exam 4: Elasticity

Deb's income has just risen from $950 per week to $1,050 per week. As a result, she decides to increase the number of movies she attends each month by 5 percent. Her demand for movies is

Correct AnswerverifiedShow Answer

If the price of gasoline rose from $2.85 to $2.95 per gallon, your expenditure on gasoline would increase if your price elasticity of demand for gasoline equals

Correct AnswerverifiedShow Answer

If the elasticity of supply is 4, a 10 percent increase in the price of a good leads to a

Correct AnswerverifiedShow Answer

If the owner of a local movie theater wanted to increase the theater's total revenue from movie admissions, what should the owner do with ticket prices?

Correct AnswerverifiedIf moviegoers' demand is elastic, the ow...View AnswerShow Answer

When Monica's Catering lowered the price of catered meals from $60 per person to $20 per person, the quantity demanded doubled from 500 meals to 1,000 meals. You can conclude that the demand for Monica's catered meals over the price range of $20 to $60 is

Correct AnswerverifiedShow Answer

Demand is elastic when a price ________ results in total revenue ________.

Correct AnswerverifiedShow Answer

Apple, the consumer electronics giant, on Tuesday rolled out new versions of its popular iPad tablet. Suppose when the price of an iPad decreases by 20 percent, the number of songs downloaded on iTunes increases by 30 percent. Based on this information iTunes are

Correct AnswerverifiedShow Answer

Elasticity measures the

Correct AnswerverifiedShow Answer

The demand for bus rides is a downward-sloping straight line demand curve. The price elasticity of demand for bus rides ________.

Correct AnswerverifiedShow Answer

The elasticity of demand is constant along a downward sloping straight-line demand curve.

Correct AnswerverifiedShow Answer

-In the figure above, when the price of a disk is $B, total revenue is shown in the graph by area

Correct AnswerverifiedShow Answer

When the price of a CD is $13 per CD, 39,000,000 CDs per year are supplied. When the price is $15 per CD, 41,000,000 CDs per year are supplied. What is the elasticity of supply for CDs?

Correct AnswerverifiedShow Answer

Correct Answerverifieda) The percentage change in qu...View AnswerShow Answer

Which of the following statements is FALSE?

Correct AnswerverifiedShow Answer

If a consumer is relatively insensitive to changes in the price of a good, then the consumer's demand for the good is

Correct AnswerverifiedShow Answer

If the supply for a good is elastic, that means that when price increases, the

Correct AnswerverifiedShow Answer

Which of the following is likely to have the smallest price elasticity of demand?

Correct AnswerverifiedShow Answer

-The table above gives the demand schedule for snow peas. If the price of snow peas falls from $4.00 to $3.00 a bushel, total revenue will

Correct AnswerverifiedShow Answer

If the demand curve for tacos is a downward sloping straight line, at which of the following prices is the demand the most elastic?

Correct AnswerverifiedShow Answer

If there is an increase in the price of broccoli because of disastrous weather that destroys about half of this year's spinach crop, which of the following could be TRUE?

Correct AnswerverifiedShow Answer

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If moviegoers' demand is elastic, the ow...
View Answer

Correct Answer
verified

Demand is elastic when a price results in total revenue .

Correct Answer
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Correct Answer
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a) The percentage change in qu...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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