Question 1

Along a downward-sloping straight-line demand curve,

Accepted Answer

A)  demand is perfectly elastic when price is zero.
B)  demand is unit elastic at all prices.
C)  demand is very inelastic at high prices but becomes more elastic as price decreases.
D)  demand is very elastic at high prices but becomes less elastic as price decreases.E) All of the above
F) C) and D)

Question 2

If consumers are price sensitive,then

Accepted Answer

A)  they will have elastic demand curves.
B)  they will have inelastic demand curves.
C)  they will have no demand curve.
D)  they will not shop around very much.
E)  they likely perceive no close substitutes.F) A) and E)
G) B) and C)

Question 3

In the space provided in the graph above,draw a demand curve D1,and then draw a second demand curve,D2,that is less elastic.

Accepted Answer

The answer of In the space provided in the graph...

Question 4

If the price of a service tripled and people consumed exactly the same quantity,how much is the elasticity of demand for that service?

Accepted Answer

0 (perfect...

Question 5

When demand is perfectly elastic the entire tax burden falls on the ____.

Accepted Answer

The answer of When demand is perfectly elastic the entire...

Question 6

The demand for goods such as household electricity,bread and legal services tend to be

Accepted Answer

A)  perfectly elastic
B)  relatively elastic
C)  unit elastic
D)  relatively inelasticE) A) and B)
F) A) and D)

Question 7

Ideally,an ad will make a buyer feel that she ______ have the product.In other words,the ad makes the good more ________.

Accepted Answer

The answer of Ideally,an ad will make a buyer feel...

Question 8

If price were increased from $25 to $26 and quantity demanded fell from 10 to 9,calculate elasticity;state whether demand is elastic,unit elastic,or inelastic;and find out how much total revenue was when price was $25 and $26.

Accepted Answer

P1 = $25;P...

Question 9

If demand is inelastic and price is raised

Accepted Answer

A)  quantity demanded will fall and total revenue will fall.
B)  quantity demanded will fall and total revenue will rise.
C)  quantity demanded will rise and total revenue will rise.
D)  quantity demanded will rise and total revenue will fall.E) A) and B)
F) None of the above

Question 10

If the price of bottled air sold at a colony on the moon doubles,and yet quantity demanded does not change,demand is _______.

Accepted Answer

The answer of If the price of bottled air sold...

Question 11

-How much is the tax?

Accepted Answer

A)  $6.00
B)  $4.50
C)  $3.00
D)  $1.50
E)  $0F) C) and E)
G) A) and E)

Question 12

Which of the following has the highest elasticity of demand?

Accepted Answer

A)  Medical care
B)  Telephone services
C)  Bread
D)  Household electricity
E)  Restaurant mealsF) None of the above
G) C) and E)

Question 13

Assume that demand is elastic.Of the elasticities shown here,which is the lowest that would still be considered elastic?

Accepted Answer

A)  10.0
B)  1.01
C)  1.00
D)  0.01E) None of the above
F) A) and B)

Question 14

Cross elasticity is defined as the _______________.

Accepted Answer

A)  percentage change in price of a one good (
A)  ,divided by the percentage change in the quantity demanded of a related good (
B)  
B)  percentage change in quantity demanded for one good (
A)  ,divided by the percentage change in the price of a related good (
B)  
C)  percentage change in quantity demanded for one good (
A)  ,divided by the percentage change in the price of that good (
A)  
D)  change in quantity demanded for one good (
A)  ,divided by the change in the price of a related good (
B)  E) A) and B)
F) B) and D)

Question 15

If you buy 10% more compact discs in response to a 20% increase in income,your income elasticity for compact discs is _____.

Accepted Answer

A)  0.5
B)  1.0
C)  2.0
D)  0.0E) All of the above
F) B) and D)

Question 16

If the price of chocolate goes up 20% and quantity demanded falls by 5%,demand is ______.

Accepted Answer

The answer of If the price of chocolate goes up...

Question 17

When supply is perfectly elastic,the entire tax burden falls on the ____.

Accepted Answer

The answer of When supply is perfectly elastic,the entire tax...

Question 18

If the elasticity of demand for tongue depressors is 0.5,

Accepted Answer

A)  a 10% rise in the price of tongue depressors will lower quantity demanded by 50%.
B)  an increase in the price of tongue depressors will lower total revenue for sellers.
C)  a 10% increase in the price of tongue depressors will not change its total revenue.
D)  a 10% fall in the price of tongue depressors will raise quantity demanded by 5%.E) None of the above
F) All of the above

Question 19

Which of the following characteristics would describe a product with an elastic demand?

Accepted Answer

A)  The good has many different uses and many substitutes for the product exist.
B)  The good has relatively few uses and few substitutes for the product exist.
C)  The good is considered a luxury and few substitutes for the product exist.
D)  The good has many different uses and the price of the product is low relative to the buyer's income.E) A) and B)
F) A) and C)

Question 20

Statement I: In the very short run,the demand for gasoline and home heating oil is almost perfectly inelastic.
Statement II: When American consumers traded in their gas-guzzler automobiles for Japanese fuel-efficient cars from the mid-1970s to the mid 1980s,this was an example of how the demand for gasoline had become more elastic in the long run.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.E) B) and C)
F) All of the above

Exam 18: The Price Elasticities of Demand and Supply

If you buy 10% more compact discs in response to a 20% increase in income,your income elasticity for compact discs is _____.

Correct Answer
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If consumers are price sensitive,then

Correct Answer
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If price were increased from $25 to $26 and quantity demanded fell from 10 to 9,calculate elasticity;state whether demand is elastic,unit elastic,or inelastic;and find out how much total revenue was when price was $25 and $26.

Correct Answer
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P1 = $25;P...
View Answer

Assume that demand is elastic.Of the elasticities shown here,which is the lowest that would still be considered elastic?

Correct Answer
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If demand is inelastic and price is raised

Correct Answer
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Which of the following characteristics would describe a product with an elastic demand?

Correct Answer
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The demand for goods such as household electricity,bread and legal services tend to be

Correct Answer
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In the space provided in the graph above,draw a demand curve D1,and then draw a second demand curve,D2,that is less elastic.

Correct Answer
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When demand is perfectly elastic the entire tax burden falls on the ____.

Correct Answer
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Cross elasticity is defined as the _______________.

Correct Answer
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Which of the following has the highest elasticity of demand?

Correct Answer
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If the price of bottled air sold at a colony on the moon doubles,and yet quantity demanded does not change,demand is _______.

Correct Answer
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-How much is the tax?

Correct Answer
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When supply is perfectly elastic,the entire tax burden falls on the ____.

Correct Answer
verified

If the elasticity of demand for tongue depressors is 0.5,

Correct Answer
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If the price of chocolate goes up 20% and quantity demanded falls by 5%,demand is ______.

Correct Answer
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Ideally,an ad will make a buyer feel that she have the product.In other words,the ad makes the good more __.

Correct Answer
verified

If the price of a service tripled and people consumed exactly the same quantity,how much is the elasticity of demand for that service?

Correct Answer
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0 (perfect...
View Answer

Correct Answer
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Along a downward-sloping straight-line demand curve,

Correct Answer
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Exam 18: The Price Elasticities of Demand and Supply

If you buy 10% more compact discs in response to a 20% increase in income,your income elasticity for compact discs is _____.

Correct AnswerverifiedShow Answer

If consumers are price sensitive,then

Correct AnswerverifiedShow Answer

If price were increased from $25 to $26 and quantity demanded fell from 10 to 9,calculate elasticity;state whether demand is elastic,unit elastic,or inelastic;and find out how much total revenue was when price was $25 and $26.

Correct AnswerverifiedP1 = $25;P...View AnswerShow Answer

Assume that demand is elastic.Of the elasticities shown here,which is the lowest that would still be considered elastic?

Correct AnswerverifiedShow Answer

If demand is inelastic and price is raised

Correct AnswerverifiedShow Answer

Which of the following characteristics would describe a product with an elastic demand?

Correct AnswerverifiedShow Answer

The demand for goods such as household electricity,bread and legal services tend to be

Correct AnswerverifiedShow Answer

In the space provided in the graph above,draw a demand curve D1,and then draw a second demand curve,D2,that is less elastic.

Correct AnswerverifiedShow Answer

When demand is perfectly elastic the entire tax burden falls on the ____.

Correct AnswerverifiedShow Answer

Cross elasticity is defined as the _______________.

Correct AnswerverifiedShow Answer

Which of the following has the highest elasticity of demand?

Correct AnswerverifiedShow Answer

If the price of bottled air sold at a colony on the moon doubles,and yet quantity demanded does not change,demand is _______.

Correct AnswerverifiedShow Answer

-How much is the tax?

Correct AnswerverifiedShow Answer

When supply is perfectly elastic,the entire tax burden falls on the ____.

Correct AnswerverifiedShow Answer

If the elasticity of demand for tongue depressors is 0.5,

Correct AnswerverifiedShow Answer

If the price of chocolate goes up 20% and quantity demanded falls by 5%,demand is ______.

Correct AnswerverifiedShow Answer

Ideally,an ad will make a buyer feel that she ______ have the product.In other words,the ad makes the good more ________.

Correct AnswerverifiedShow Answer

If the price of a service tripled and people consumed exactly the same quantity,how much is the elasticity of demand for that service?

Correct Answerverified0 (perfect...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Along a downward-sloping straight-line demand curve,

Correct AnswerverifiedShow Answer

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P1 = $25;P...
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Ideally,an ad will make a buyer feel that she have the product.In other words,the ad makes the good more __.

Correct Answer
verified

Correct Answer
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0 (perfect...
View Answer

Correct Answer
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Correct Answer
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