Question 1

The value of the price elasticity of demand for a good will be relatively large when

Accepted Answer

A)   there are no good substitutes available for the good.
B)   the time period in question is relatively short.
C)   the good is a luxury rather than a necessity.
D)   All of the above are correct.E) C) and D)
F) B) and C)

Question 2

If the price elasticity of demand for a good is 1,then a 3 percent decrease in price results in a

Accepted Answer

A)   0.1 percent increase in the quantity demanded.
B)   1 percent increase in the quantity demanded.
C)   3 percent increase in the quantity demanded.
D)   4 percent increase in the quantity demanded.E) None of the above
F) B) and D)

Question 3

If the cross-price elasticity of demand between two goods is negative,are the goods complements or substitutes?

Accepted Answer

The goods ...

Question 4

If the price of natural gas rises,when is the price elasticity of demand likely to be the highest?

Accepted Answer

A)   immediately after the price increase
B)   one month after the price increase
C)   three months after the price increase
D)   one year after the price increaseE) A) and B)
F) A) and C)

Question 5

How did the farm population in the United States change between 1950 and today?

Accepted Answer

A)   It dropped from 10 million to fewer than 3 million people.
B)   It dropped from 20 million to fewer than 5 million people.
C)   It dropped from 30 million to just over 6 million people.
D)   It increased from 10 million to almost 13 million people.E) All of the above
F) B) and C)

Question 6

Price elasticity of demand along a linear,downward-sloping demand curve increases as price falls.

Accepted Answer

A) True 
 B)False

Question 7

The federal government is concerned about obesity in the United States.Congress is considering two plans.One will ban the production and sale of "junk food." The other will increase nutrition-education programs and include substantial advertising campaigns to encourage healthy eating habits.The junk-food ban program

Accepted Answer

A)   and the education program will reduce the quantity of junk food sold and raise the price.
B)   and the education program will reduce the quantity of junk food sold and lower the price.
C)   will reduce the quantity of junk food sold and raise the price.The education program will reduce the quantity of junk food sold and lower the price.
D)   will reduce the quantity of junk food sold and lower the price.The education program will reduce the quantity of junk food sold and raise the price.E) B) and C)
F) A) and D)

Question 8

Figure 5-11 
-Refer to Figure 5-11.If the price rises from point D to point C,total revenue

Accepted Answer

A)   increases,and demand is price elastic.
B)   decreases,and demand is price elastic.
C)   increases,and demand is price inelastic.
D)   decreases,and demand is price inelastic.E) A) and C)
F) B) and C)

Question 9

Demand is said to be price elastic if

Accepted Answer

A)   the price of the good responds substantially to changes in demand.
B)   demand shifts substantially when income or the expected future price of the good changes.
C)   buyers do not respond much to changes in the price of the good.
D)   buyers respond substantially to changes in the price of the good.E) None of the above
F) A) and B)

Question 10

If the price elasticity of supply is 1.2,and price increased by 5%,quantity supplied would

Accepted Answer

A)   increase by 4.2%.
B)   increase by 6%.
C)   decrease by 4.2%.
D)   decrease by 6%.E) A) and D)
F) B) and D)

Question 11

Figure 5-3 
-Refer to Figure 5-3.Using the midpoint method,what is the price elasticity of supply between $15 and $25?

Accepted Answer

The price ...

Question 12

An increase in the price of cheese crackers from $2.25 to $2.45 per box causes suppliers of cheese crackers to increase their quantity supplied from 125 boxes per minute to 145 boxes per minute.Using the midpoint method,supply is

Accepted Answer

A)   elastic,and the price elasticity of supply is 1.74.
B)   elastic,and the price elasticity of supply is 0.57.
C)   inelastic,and the price elasticity of supply is 1.74.
D)   inelastic,and the price elasticity of supply is 0.57.E) A) and B)
F) B) and D)

Question 13

Which of the following is likely to have the most price inelastic demand?

Accepted Answer

A)   white chocolate chip with macadamia nut cookies
B)   hardback novels
C)   salt
D)   box seats at a major league baseball gameE) A) and C)
F) A) and D)

Question 14

If a 40% change in price results in a 25% change in quantity supplied,then the price elasticity of supply is about

Accepted Answer

A)   0.63,and supply is elastic.
B)   0.63,and supply is inelastic.
C)   1.60,and supply is elastic.
D)   1.60,and supply is inelastic.E) B) and C)
F) None of the above

Question 15

Figure 5-6 
-Refer to Figure 5-6.If the price decreased from $18 to $6,total revenue would

Accepted Answer

A)   increase by $1,200,and demand is elastic between points A and C.
B)   increase by $800,and demand is elastic between points A and C.
C)   decrease by $1,200,and demand is inelastic between points A and C.
D)   decrease by $800,and demand is inelastic between points A and C.E) A) and D)
F) B) and D)

Question 16

If a firm is facing elastic demand,then the firm should decrease price to increase revenue.

Accepted Answer

A) True 
 B)False

Question 17

The case of perfectly elastic demand is illustrated by a demand curve that is

Accepted Answer

A)   vertical.
B)   horizontal.
C)   downward-sloping but relatively steep.
D)   downward-sloping but relatively flat.E) All of the above
F) B) and C)

Question 18

Figure 5-16 
-Refer to Figure 5-16.Using the midpoint method,what is the price elasticity of supply between point A and point B?

Accepted Answer

A)   0.58
B)   0.71
C)   1.06
D)   1.4E) None of the above
F) All of the above

Question 19

The discovery of a new hybrid wheat would increase the supply of wheat.As a result,wheat farmers would realize an increase in total revenue if the

Accepted Answer

A)   supply of wheat is elastic.
B)   supply of wheat is inelastic.
C)   demand for wheat is inelastic.
D)   demand for wheat is elastic.E) C) and D)
F) A) and D)

Question 20

When demand is elastic,an increase in price will cause

Accepted Answer

A)   an increase in total revenue.
B)   a decrease in total revenue.
C)   no change in total revenue but an increase in quantity demanded.
D)   no change in total revenue but a decrease in quantity demanded.E) B) and C)
F) B) and D)

Exam 5: Elasticity and Its Application

The value of the price elasticity of demand for a good will be relatively large when

Correct Answer
verified

Figure 5-6 -Refer to Figure 5-6.If the price decreased from $18 to $6,total revenue would

Correct Answer
verified

How did the farm population in the United States change between 1950 and today?

Correct Answer
verified

If the price of natural gas rises,when is the price elasticity of demand likely to be the highest?

Correct Answer
verified

Figure 5-3 -Refer to Figure 5-3.Using the midpoint method,what is the price elasticity of supply between $15 and $25?

Correct Answer
verified
The price ...
View Answer

When demand is elastic,an increase in price will cause

Correct Answer
verified

If the price elasticity of demand for a good is 1,then a 3 percent decrease in price results in a

Correct Answer
verified

If a firm is facing elastic demand,then the firm should decrease price to increase revenue.

Correct Answer
verified

If a 40% change in price results in a 25% change in quantity supplied,then the price elasticity of supply is about

Correct Answer
verified

An increase in the price of cheese crackers from $2.25 to $2.45 per box causes suppliers of cheese crackers to increase their quantity supplied from 125 boxes per minute to 145 boxes per minute.Using the midpoint method,supply is

Correct Answer
verified

If the price elasticity of supply is 1.2,and price increased by 5%,quantity supplied would

Correct Answer
verified

Figure 5-16 -Refer to Figure 5-16.Using the midpoint method,what is the price elasticity of supply between point A and point B?

Correct Answer
verified

Demand is said to be price elastic if

Correct Answer
verified

If the cross-price elasticity of demand between two goods is negative,are the goods complements or substitutes?

Correct Answer
verified
The goods ...
View Answer

Correct Answer
verified

The case of perfectly elastic demand is illustrated by a demand curve that is

Correct Answer
verified

The discovery of a new hybrid wheat would increase the supply of wheat.As a result,wheat farmers would realize an increase in total revenue if the

Correct Answer
verified

Figure 5-11 -Refer to Figure 5-11.If the price rises from point D to point C,total revenue

Correct Answer
verified

Price elasticity of demand along a linear,downward-sloping demand curve increases as price falls.

Correct Answer
verified

Which of the following is likely to have the most price inelastic demand?

Correct Answer
verified

Exam 5: Elasticity and Its Application

The value of the price elasticity of demand for a good will be relatively large when

Correct AnswerverifiedShow Answer

Figure 5-6 -Refer to Figure 5-6.If the price decreased from $18 to $6,total revenue would

Correct AnswerverifiedShow Answer

How did the farm population in the United States change between 1950 and today?

Correct AnswerverifiedShow Answer

If the price of natural gas rises,when is the price elasticity of demand likely to be the highest?

Correct AnswerverifiedShow Answer

Figure 5-3 -Refer to Figure 5-3.Using the midpoint method,what is the price elasticity of supply between $15 and $25?

Correct AnswerverifiedThe price ...View AnswerShow Answer

When demand is elastic,an increase in price will cause

Correct AnswerverifiedShow Answer

If the price elasticity of demand for a good is 1,then a 3 percent decrease in price results in a

Correct AnswerverifiedShow Answer

If a firm is facing elastic demand,then the firm should decrease price to increase revenue.

Correct AnswerverifiedShow Answer

If a 40% change in price results in a 25% change in quantity supplied,then the price elasticity of supply is about

Correct AnswerverifiedShow Answer

An increase in the price of cheese crackers from $2.25 to $2.45 per box causes suppliers of cheese crackers to increase their quantity supplied from 125 boxes per minute to 145 boxes per minute.Using the midpoint method,supply is

Correct AnswerverifiedShow Answer

If the price elasticity of supply is 1.2,and price increased by 5%,quantity supplied would

Correct AnswerverifiedShow Answer

Figure 5-16 -Refer to Figure 5-16.Using the midpoint method,what is the price elasticity of supply between point A and point B?

Correct AnswerverifiedShow Answer

Demand is said to be price elastic if

Correct AnswerverifiedShow Answer

If the cross-price elasticity of demand between two goods is negative,are the goods complements or substitutes?

Correct AnswerverifiedThe goods ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The case of perfectly elastic demand is illustrated by a demand curve that is

Correct AnswerverifiedShow Answer

The discovery of a new hybrid wheat would increase the supply of wheat.As a result,wheat farmers would realize an increase in total revenue if the

Correct AnswerverifiedShow Answer

Figure 5-11 -Refer to Figure 5-11.If the price rises from point D to point C,total revenue

Correct AnswerverifiedShow Answer

Price elasticity of demand along a linear,downward-sloping demand curve increases as price falls.

Correct AnswerverifiedShow Answer

Which of the following is likely to have the most price inelastic demand?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The price ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The goods ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified