Download Download Practice problems on Chapter 5... Show Homework -4 1) Elasticity improves our understanding of supply and demand by adding a. measures of equity. b. measures of efficiency. c. a quantitative element to our analysis. d. a qualitative element to our analysis. 2) Demand is said to be inelastic if a. buyers respond substantially to changes in the price of the good. b. demand shifts only slightly when the price of the good changes. c. the quantity demanded changes only slightly when the price of the good changes. d. the price of the good responds only slightly to changes in demand. 3) When quantity demanded responds strongly to changes in price, demand is said to be a. fluid. b. elastic. c. dynamic. d. highly variable. 4) When quantity demanded responds strongly to changes in price, demand is said to be a. fluid. b. elastic. c. dynamic. d. highly variable. 5) There are very few, if any, good substitutes for motor oil. Therefore, a. the demand for motor oil would tend to be inelastic. b. the demand for motor oil would tend to be elastic. c. the demand for motor oil would tend to respond strongly to changes in prices of other goods. d. the supply of motor oil would tend to respond strongly to changes in people’s tastes for large cars relative to their tastes for small cars. 6) When the price of bubble gum is $0.50, the quantity demanded is 400 packs per day. When the price falls to $0.40, the quantity demanded increases to 600. Given this information and using the midpoint method, we know that the demand for bubble gum is a. inelastic. b. elastic. c. unit elastic. d. perfectly inelastic. 7) Suppose you calculate the price elasticity of demand for a certain good and you report that the elasticity is 0.8. The fact that the elasticity is a positive number means that a. when the price of the good increases, the quantity demanded increases in response. b. demand for the good is elastic. c. you have dropped the minus sign and reported the absolute value of the elasticity. d. the good has close substitutes and/or the good is a luxury. 8) If the price elasticity of demand for a good is 1.65, then a 3 percent decrease in price results in a a. 0.55 percent increase in the quantity demanded. b. 1.82 percent increase in the quantity demanded. c. 4.95 percent increase in the quantity demanded. d. 5.55 percent increase in the quantity demanded. 9) When the local used bookstore prices economics books at $15.00 each, they generally sell 70 books per month. If they lower the price to $7.00, sales increase to 90 books per month. Given this information, we know that the price elasticity of demand for economics books is about a. 2.91, and an increase in price from $7.00 to $15.00 results in an increase in total revenue. b. 2.91, and an increase in price from $7.00 to $15.00 results in a decrease in total revenue. c. 0.34, and an increase in price from $7.00 to $15.00 results in an increase in total revenue. d. 0.34, and an increase in price from $7.00 to $15.00 results in a decrease in total revenue. 10) The case of perfectly elastic demand is illustrated by a demand curve that is a. vertical. b. horizontal. c. downward-sloping but relatively steep. d. downward-sloping but relatively flat. 11) If the demand for donuts is elastic, then a decrease in the price of donuts will a. increase total revenue of donut sellers. b. decrease total revenue of donut sellers. c. not change total revenue of donut sellers. d. There is not enough information to answer this question. 12) The price elasticity of demand changes as we move along a a. horizontal demand curve. b. vertical demand curve. c. linear, downward-sloping demand curve. d. All of the above are correct. 13) If a 6 percent increase in income results in a 10 percent increase in the quantity demanded of pizza, then the income elasticity of demand for pizza is a. negative and therefore pizza is an normal good. b. negative and therefore pizza is a inferior good. c. positive and therefore pizza is an inferior good. d. positive and therefore pizza is a normal good. 14) Which of the following should be held constant when calculating an income elasticity of demand? a. the quantity of the good demanded b. the price of the good c. income d. All of the above should be held constant. 15) An increase in the price of pure chocolate morsels from $2.25 to $2.45 causes suppliers of chocolate morsels to increase their quantity supplied from 125 bags per minute to 145 bags per minute. Supply is 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. 16) If the price elasticity of supply is zero, then a. supply is more elastic than it is in any other case. b. the supply curve is horizontal. c. the quantity supplied is the same, regardless of price. d. a change in demand will cause a relatively small change in the equilibrium price. What happens if demand is elastic and the price is lowered?If demand is elastic at a given price level, then should a company cut its price, the percentage drop in price will result in an even larger percentage increase in the quantity sold—thus raising total revenue.
When demand is elastic a decrease in price will cause quizlet?When demand is elastic, a decrease in price will result in an increase in total revenue. When demand is inelastic, an increase in price will result in an increase in total revenue. When demand is inelastic, a decrease in price will result in an increase in total revenue.
What happens if demand is elastic and the price is lowered quizlet?Raise price when demand is elastic, because the quantity demanded will increase. Lower price when demand is elastic, because the quantity demanded will decrease.
Are donuts elastic or inelastic?Because donuts have an inelastic demand, when the price of donuts decreases, the total expenditure on donuts decreases.
|
If the demand for donuts is elastic, then a decrease in the price of donuts will
zusammenhängende Posts
Urheberrechte © © 2024 defrojeostern Inc.
