Question 1

Suppose the price of a good rises from $2.25 to $3.15, and the quantity demanded changes from 2,360 units to 1,250 units. Calculate the price elasticity of demand using the midpoint formula, and indicate whether demand is elastic, inelastic, or unit elastic.

Accepted Answer

The answer of Suppose the price of a good rises...

Question 2

The elasticity of demand changes

Accepted Answer

A)   along a vertical demand curve.
B)   along a horizontal demand curve.
C)   along a linear, downward-sloping demand curve.
D)   along a supply curve.
E)   only when the demand curve shifts.F) A) and E)
G) C) and D)

Question 3

If the cross-price elasticity between two goods is positive, then it is most likely that the two goods are

Accepted Answer

A)   both inferior goods.
B)   both luxury goods.
C)   complements.
D)   substitutes.
E)   necessities.F) C) and D)
G) A) and C)

Question 4

To say that gasoline has a low price elasticity of demand is to say the quantity demanded of gasoline

Accepted Answer

A)   has a relatively flat demand curve.
B)   has a horizontal demand curve.
C)   is not sensitive to changes in gasoline prices.
D)   is very sensitive to changes in gasoline prices.
E)   is very sensitive to changes in consumer income.F) None of the above
G) A) and B)

Question 5

The measurement for the price elasticity of demand is

Accepted Answer

A)   unit free.
B)   in percentage terms.
C)   in dollar terms.
D)   in terms of the quantity measurement of the good involved.
E)   in terms of the currency used to purchase the good.F) B) and E)
G) A) and B)

Question 6

Which of the following is not a likely result of a price floor?

Accepted Answer

A)   Excess supply of a good
B)   A persistent shortage
C)   A market price higher than equilibrium
D)   The quantity supplied exceeds the quantity demanded.
E)   Resources are diverted away from other activities to deal with the extra output.F) B) and E)
G) D) and E)

Question 7

Suppose that the government imposes a sales tax on the consumption of natural gas, which of the following would have the least impact on the producers of natural gas?

Accepted Answer

A)   Perfectly elastic demand
B)   Perfectly inelastic demand
C)   Unitary elastic demand
D)   Zero demand
E)   Plastic is an inferior good.F) A) and B)
G) D) and E)

Question 8

If demand for a product is unit elastic, then increasing the price of the product leaves total revenue unchanged.

Accepted Answer

A) True 
 B)False

Question 9

Total revenue decreases if price increases and demand is inelastic.

Accepted Answer

A) True 
 B)False

Question 10

Use the following data for a demand curve.   
(A)Use the midpoint formula to calculate the elasticity between a price of $14 and $15.
(B)Use the midpoint formula to calculate the elasticity between $7 and $8.
(C)Because this is a linear demand curve, why does the elasticity change?
(D)At what point is price $\times$ quantity maximized? What is the elasticity at that point?

Accepted Answer

(A)Elasticity between $14 and $15: 9.67
...

Question 11

Exhibit 4-1 
-Refer to Exhibit 4-1. The price elasticity of demand is most likely to be elastic

Accepted Answer

A)   at point A.
B)   at point B.
C)   at point C.
D)   anywhere along the demand curve.
E)   nowhere along the demand curve.F) A) and B)
G) B) and E)

Question 12

The minimum wage is an example of a

Accepted Answer

A)   price floor.
B)   price ceiling.
C)   market equilibrium.
D)   restriction on quantity.
E)   price elasticity.F) A) and D)
G) None of the above

Question 13

The price elasticity of demand is expressed in dollar changes in price and quantity demanded.

Accepted Answer

A) True 
 B)False

Question 14

If supply decreases and total revenue in an industry increases,

Accepted Answer

A)   demand elasticity must be equal to 1.
B)   demand must be horizontal.
C)   demand elasticity must be greater than 1.
D)   we have a perfectly implausible situation.
E)   demand elasticity must be less than 1.F) B) and D)
G) A) and B)

Question 15

If the price of a good decreases by 5 percent and total revenue does not change, then the price elasticity of demand is

Accepted Answer

A)   perfectly elastic.
B)   unit elastic.
C)   equal to .05.
D)   equal to 1.05.
E)   perfectly inelastic.F) C) and D)
G) All of the above

Question 16

Suppose the price of a good falls from $200 to $150, and the quantity demanded changes from 45,000 units to 50,500 units. Calculate the price elasticity of demand using the midpoint formula, and indicate whether demand is elastic, inelastic, or unit elastic.

Accepted Answer

The answer of Suppose the price of a good falls...

Question 17

Calculate the price elasticity of demand if a 2.6 percent change in the price of a product results in a 10.5 percent change in quantity demanded, and indicate whether demand is elastic, inelastic, or unit elastic.

Accepted Answer

10.5 <img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30">  2.6...

Question 18

The concept of price elasticity of demand makes it possible to

Accepted Answer

A)   predict how much demand will shift with a change in price.
B)   predict how much price will change with a change in demand.
C)   predict how much price will change with a change in supply.
D)   predict how much supply will shift with a change in price.
E)   anticipate shifts in demand.F) B) and C)
G) A) and D)

Question 19

When price rises by 3 percent and quantity demanded changes by 6 percent,

Accepted Answer

A)   total revenue falls 3 percent.
B)   total revenue falls by half.
C)   total revenue doubles.
D)   total revenue does not change.
E)   total revenue increases 18 percent.F) C) and D)
G) A) and D)

Question 20

Suppose there is a sudden decrease in the supply of oranges. Compare the effect of the change in orange supply on the price of oranges in a market with high demand elasticity and a market with low demand elasticity.

Accepted Answer

The price of oranges will increase in bo...

Exam 4: Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

If the cross-price elasticity between two goods is positive, then it is most likely that the two goods are

Correct Answer
verified

The price elasticity of demand is expressed in dollar changes in price and quantity demanded.

Correct Answer
verified

If supply decreases and total revenue in an industry increases,

Correct Answer
verified

If demand for a product is unit elastic, then increasing the price of the product leaves total revenue unchanged.

Correct Answer
verified

Suppose that the government imposes a sales tax on the consumption of natural gas, which of the following would have the least impact on the producers of natural gas?

Correct Answer
verified

Suppose there is a sudden decrease in the supply of oranges. Compare the effect of the change in orange supply on the price of oranges in a market with high demand elasticity and a market with low demand elasticity.

Correct Answer
verified
The price of oranges will increase in bo...
View Answer

Correct Answer
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(A)Elasticity between $14 and $15: 9.67
...
View Answer

The measurement for the price elasticity of demand is

Correct Answer
verified

If the price of a good decreases by 5 percent and total revenue does not change, then the price elasticity of demand is

Correct Answer
verified

Total revenue decreases if price increases and demand is inelastic.

Correct Answer
verified

When price rises by 3 percent and quantity demanded changes by 6 percent,

Correct Answer
verified

Exhibit 4-1 -Refer to Exhibit 4-1. The price elasticity of demand is most likely to be elastic

Correct Answer
verified

The elasticity of demand changes

Correct Answer
verified

Suppose the price of a good rises from $2.25 to $3.15, and the quantity demanded changes from 2,360 units to 1,250 units. Calculate the price elasticity of demand using the midpoint formula, and indicate whether demand is elastic, inelastic, or unit elastic.

Correct Answer
verified

The minimum wage is an example of a

Correct Answer
verified

The concept of price elasticity of demand makes it possible to

Correct Answer
verified

Which of the following is not a likely result of a price floor?

Correct Answer
verified

Suppose the price of a good falls from $200 to $150, and the quantity demanded changes from 45,000 units to 50,500 units. Calculate the price elasticity of demand using the midpoint formula, and indicate whether demand is elastic, inelastic, or unit elastic.

Correct Answer
verified

Calculate the price elasticity of demand if a 2.6 percent change in the price of a product results in a 10.5 percent change in quantity demanded, and indicate whether demand is elastic, inelastic, or unit elastic.

Correct Answer
verified
10.5 2.6...
View Answer

To say that gasoline has a low price elasticity of demand is to say the quantity demanded of gasoline

Correct Answer
verified

Exam 4: Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

If the cross-price elasticity between two goods is positive, then it is most likely that the two goods are

Correct AnswerverifiedShow Answer

The price elasticity of demand is expressed in dollar changes in price and quantity demanded.

Correct AnswerverifiedShow Answer

If supply decreases and total revenue in an industry increases,

Correct AnswerverifiedShow Answer

If demand for a product is unit elastic, then increasing the price of the product leaves total revenue unchanged.

Correct AnswerverifiedShow Answer

Suppose that the government imposes a sales tax on the consumption of natural gas, which of the following would have the least impact on the producers of natural gas?

Correct AnswerverifiedShow Answer

Suppose there is a sudden decrease in the supply of oranges. Compare the effect of the change in orange supply on the price of oranges in a market with high demand elasticity and a market with low demand elasticity.

Correct AnswerverifiedThe price of oranges will increase in bo...View AnswerShow Answer

Correct Answerverified(A)Elasticity between $14 and $15: 9.67...View AnswerShow Answer

The measurement for the price elasticity of demand is

Correct AnswerverifiedShow Answer

If the price of a good decreases by 5 percent and total revenue does not change, then the price elasticity of demand is

Correct AnswerverifiedShow Answer

Total revenue decreases if price increases and demand is inelastic.

Correct AnswerverifiedShow Answer

When price rises by 3 percent and quantity demanded changes by 6 percent,

Correct AnswerverifiedShow Answer

Exhibit 4-1 -Refer to Exhibit 4-1. The price elasticity of demand is most likely to be elastic

Correct AnswerverifiedShow Answer

The elasticity of demand changes

Correct AnswerverifiedShow Answer

Suppose the price of a good rises from $2.25 to $3.15, and the quantity demanded changes from 2,360 units to 1,250 units. Calculate the price elasticity of demand using the midpoint formula, and indicate whether demand is elastic, inelastic, or unit elastic.

Correct AnswerverifiedShow Answer

The minimum wage is an example of a

Correct AnswerverifiedShow Answer

The concept of price elasticity of demand makes it possible to

Correct AnswerverifiedShow Answer

Which of the following is not a likely result of a price floor?

Correct AnswerverifiedShow Answer

Suppose the price of a good falls from $200 to $150, and the quantity demanded changes from 45,000 units to 50,500 units. Calculate the price elasticity of demand using the midpoint formula, and indicate whether demand is elastic, inelastic, or unit elastic.

Correct AnswerverifiedShow Answer

Calculate the price elasticity of demand if a 2.6 percent change in the price of a product results in a 10.5 percent change in quantity demanded, and indicate whether demand is elastic, inelastic, or unit elastic.

Correct Answerverified10.5 2.6...View AnswerShow Answer

To say that gasoline has a low price elasticity of demand is to say the quantity demanded of gasoline

Correct AnswerverifiedShow Answer

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The price of oranges will increase in bo...
View Answer

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(A)Elasticity between $14 and $15: 9.67
...
View Answer

Correct Answer
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Correct Answer
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10.5 2.6...
View Answer

Correct Answer
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