Chapter 5 ECU Microeconomics

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Posted on

May 23rd, 2023

question

In general, elasticity is the friction that develops between buyers and sellers in a market.

answer

False

question

The price elasticity of demand measures a buyers responsiveness to a change in the price of a good.

answer

True

question

Demand is said to be elastic if the price of the good responds substantially to changes in demand

answer

False

question

When quantity demanded responds only slightly to changes in price, demand, is said to be elastic

answer

False

question

Demand for a good would tend to be more inelastic the fewer the available substitutes

answer

True

question

Chocolate chip cookie dough ice cream would tend to have very elastic demand because it must be eaten quickly

answer

False

question

A good will have a more inelastic demand the greater the availability of close substitutes

answer

False

question

The greater the price elasticity of demand the more the product is a necessity

answer

False

question

If the price elasticity of demand for a good is 4.0, then a 10% increase in price would result in a 4.0% decrease in quantity demanded

answer

False

question

If a 15% increase in price causes a 30% decrease in quantity demanded, this product might have no close substitute.

answer

False

question

Demand is elastic if elasticity is less than 1

answer

False

question

Demand is inelastic if elasticity is less than 1

answer

True

question

Demand is unit elastic if elasticity is less than 1

answer

False

question

Demand is said to be unit elastic if quantity demanded changes by the same % as the price

answer

True

question

Elasticity of demand is closely related to the slope of the demand curve. The more responsive buyers are to a change in price, the demand curve will be steeper

answer

False

question

Alice says that she would buy one banana split a day regardless of the price. If she is telling the truth, Alice's demand for banana splits is perfectly inelastic

answer

True

question

For a horizontal demand curve, slope is undefined and elasticity equals 0

answer

False

question

The difference between slope and inelasticity is that slope measures actual changes an elasticity measures % changes

answer

True

question

Suppose the price elasticity of demand for basketballs in 12. A 15% increase in price will result in a 18% decrease in the quantity of basketballs demanded

answer

True

question

The price elasticity of supply measures how much the quantity supplied responds to changes in input prices

answer

False

question

If the quantity supplied responds only slightly to changes in price, the supply is said to be elastic

answer

False

question

The main determinant of the price elasticity of supply is time

answer

True

question

If a 30% change in price causes a 15% change in quantity supplied then the price elasticity of supply is 1/2 and supply is elastic

answer

False

question

When a supply curve is relatively flat, the supply is relatively elastic

answer

True

question

If sellers don't respond at all to change in price, technological advancement must be great

answer

False

question

If the elasticity of supply is 0, then the supply is very elastic

answer

False

question

If two supply curves pass through the same point and one is steep, supply curve is more inelastic

answer

True

question

Concerning a vertical supply curve, suppliers will not respond to a change in price

answer

True

question

If the quantity supplied is the same regardless of price, then the supply curve would be elastic

answer

False

question

If the elasticity of supply of a product is 2.5 we know that supply is inelastic

answer

False

question

The elasticity of a perfectly elastic supply curve equals 0

answer

False

question

As elasticity rises, the supply curve gets flatter

answer

True

question

As the elasticity of supply approaches infinity, very small changes in price will lead to very large changes in quantity supplied

answer

True

question

A decrease in supply will cause the largest increase in price when both supply and demand are inelastic

answer

True

1 of 34

question

In general, elasticity is the friction that develops between buyers and sellers in a market.

answer

False

question

The price elasticity of demand measures a buyers responsiveness to a change in the price of a good.

answer

True

question

Demand is said to be elastic if the price of the good responds substantially to changes in demand

answer

False

question

When quantity demanded responds only slightly to changes in price, demand, is said to be elastic

answer

False

question

Demand for a good would tend to be more inelastic the fewer the available substitutes

answer

True

question

Chocolate chip cookie dough ice cream would tend to have very elastic demand because it must be eaten quickly

answer

False

question

A good will have a more inelastic demand the greater the availability of close substitutes

answer

False

question

The greater the price elasticity of demand the more the product is a necessity

answer

False

question

If the price elasticity of demand for a good is 4.0, then a 10% increase in price would result in a 4.0% decrease in quantity demanded

answer

False

question

If a 15% increase in price causes a 30% decrease in quantity demanded, this product might have no close substitute.

answer

False

question

Demand is elastic if elasticity is less than 1

answer

False

question

Demand is inelastic if elasticity is less than 1

answer

True

question

Demand is unit elastic if elasticity is less than 1

answer

False

question

Demand is said to be unit elastic if quantity demanded changes by the same % as the price

answer

True

question

Elasticity of demand is closely related to the slope of the demand curve. The more responsive buyers are to a change in price, the demand curve will be steeper

answer

False

question

Alice says that she would buy one banana split a day regardless of the price. If she is telling the truth, Alice's demand for banana splits is perfectly inelastic

answer

True

question

For a horizontal demand curve, slope is undefined and elasticity equals 0

answer

False

question

The difference between slope and inelasticity is that slope measures actual changes an elasticity measures % changes

answer

True

question

Suppose the price elasticity of demand for basketballs in 12. A 15% increase in price will result in a 18% decrease in the quantity of basketballs demanded

answer

True

question

The price elasticity of supply measures how much the quantity supplied responds to changes in input prices

answer

False

question

If the quantity supplied responds only slightly to changes in price, the supply is said to be elastic

answer

False

question

The main determinant of the price elasticity of supply is time

answer

True

question

If a 30% change in price causes a 15% change in quantity supplied then the price elasticity of supply is 1/2 and supply is elastic

answer

False

question

When a supply curve is relatively flat, the supply is relatively elastic

answer

True

question

If sellers don't respond at all to change in price, technological advancement must be great

answer

False

question

If the elasticity of supply is 0, then the supply is very elastic

answer

False

question

If two supply curves pass through the same point and one is steep, supply curve is more inelastic

answer

True

question

Concerning a vertical supply curve, suppliers will not respond to a change in price

answer

True

question

If the quantity supplied is the same regardless of price, then the supply curve would be elastic

answer

False

question

If the elasticity of supply of a product is 2.5 we know that supply is inelastic

answer

False

question

The elasticity of a perfectly elastic supply curve equals 0

answer

False

question

As elasticity rises, the supply curve gets flatter

answer

True

question

As the elasticity of supply approaches infinity, very small changes in price will lead to very large changes in quantity supplied

answer

True

question

A decrease in supply will cause the largest increase in price when both supply and demand are inelastic

answer

True

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