question
If |Ed| = 0.15, the demand is:
answer
Inelastic
question
Elastic Demand
answer
Price elasticity of demand greater than 1 in absolute value; quantity demanded that is relatively more responsive to a change in price, such that if price changes by 1%, quantity demanded changes by more than 1% as a result.
question
Inelastic Demand
answer
Price elasticity of demand less than 1 in absolute value; quantity demanded that is relatively less responsive to a change in price, such that if price changes by 1%, quantity demanded changes by less than 1% as a result.
question
Unit-Elastic Demand
answer
Price elasticity of demand equal to 1 in absolute value; prices and quantities demanded change by equal percentages, such that if price changes by 1%, quantity demanded changes by 1% as a result.
question
Perfectly Elastic Demand
answer
Infinite price elasticity of demand; quantity demanded that is so responsive to a change in price that is price increase or decreases by 1% quantity demanded decreases to zero.
question
Perfectly Inelastic Demand
answer
Price elasticity of demand equal to zero; quantity demanded is completely nonresponsive to price changes, such that any increases or decreases in price leave quantity demanded unchanged.
question
The more a good or service is considered to be a necessity, the relatively more _____ demand will be.
answer
Inelastic
question
If Ed = -0.85, the demand is:
answer
Inelastic.
question
When |Ed| < 1, the demand is _____.
answer
Inelastic.
question
If the price elasticity of demand (|Ed|) equals 1.25, the demand is:
answer
Elastic.
question
When |Ed| > 1, the demand is _____.
answer
Elastic.
question
Which of the following statements is true?
answer
- The elasticity calculation uses percentage changes in price and quantity.
- A relationship exists between slope and elastic, but they are not the same thing.
- Slope uses changes in price and quantity.
- A relationship exists between slope and elastic, but they are not the same thing.
- Slope uses changes in price and quantity.
question
A price elasticity of demand of -1.25 means that if the price decrease by 10%, the quantity demanded will _____ by ______ %.
answer
Increase; 12.5%
question
When consumers have more _____ to adjust, demand becomes relativity more elastic.
answer
Time
question
Suppose that when the price of gasoline is $4 per gallon, the total amount of gasoline purchased in the United States is 8 million barrels per day. Also, suppose that when the price of gas decreases to $3 per gallon, the total amount of gasoline purchased is 12 million barrels per day. Based on these numbers and using the midpoint formula, the price elastic of demand for gasoline is:
answer
- 1.40
question
Elasticity:
answer
Has no units attached to it.
question
Demand is perfectly inelastic when the value of the price elasticity of demand is _____.
answer
Zero
question
If the price elasticity of demand equals -4.55, the demand is:
answer
Elastic.
question
Price of Elasticity of Demand
answer
A measure of how responsive quantity demanded is to a change in price; calculated as the percentage change in quantity demanded divided by the percentage change in price.
question
_____ elasticity of demand is a measure of how responsive the quantity demanded is to a change in price.
answer
Price
question
If Es = 1.00, the supply is:
answer
Unit-elastic
question
A good for which an inverse relationship exists between the demand for the good and income is a(n) _____ good.
answer
Inferior
question
Income Elasticity of Demand
answer
A measure of how responsive demand is to a change in consumer income; calculated as the percentage change in the quantity of a good or service demanded divided by the percentage change in income.
question
Normal Good
answer
A good for which an increase in income leads to an increase in demand; a good with a positive income elasticity of demand.
question
Inferior Good
answer
A good for which an increase in income leads to a decrease in demand; a good with a negative income elasticity of demand.
question
Suppose that the quantity of umbrellas demanded at a price of $5 is 2,000 units. The company's total revenue is $_____.
answer
$10,000
question
The percentage change in the quantity demanded of one good divided by the percentage change in the price of another good is the:
answer
Cross-price elasticity of demand.
question
Cross-Price Elasticity of Demand
answer
A measure of the effect of a change in the price of one product on the quantity demanded of another; calculated as the percentage change in the quantity demanded of one good divided by the percentage change in the price of another good.
question
The more a good or a service is considered to be a _____, the relatively less elastic demand will be.
answer
Necessity
question
The price elasticity of demand is often turned into a positive number to:
answer
Make the number easier to work with when determining whether the demand is elastic, inelastic, or unit-elastic.
question
A price elasticity of supply of 1.25 means that if the price increases by 10%, the quantity supplied will _____ by _____%.
answer
Increase; 12.5%
question
Income elasticity of demand is a measure of how responsive:
answer
Demand is to change in consumer income.
question
Price _____ of supply is a measure of how responsive quantity supplies is to a change in price.
answer
Elasticity
question
The time periods associated with a set of supply curves include:
answer
- The long run.
- The immediate period.
- The short run.
- The immediate period.
- The short run.
question
Immediate Period
answer
The time period in which producers cannot increase their use of economic resources to increase quantity supplied.
question
Short Run
answer
The time period in which at least one input of production is fixed but other inputs can be changed.
question
Long Run
answer
The time period in which all inputs of production can be changed.
question
If Es = 0.25, the supply is:
answer
Inelastic.
question
The more of a good or a service is considered to be a luxury, the relatively more _____ demand will be.
answer
Elastic
question
The more _____ a market is defined, the relatively more inelastic demand will be.
answer
Broadly
question
Price elasticity of supply is a positive number because:
answer
Of the law of supply.
question
The time period in which producers cannot increase their use of economic resources to increase quantity supplied is the:
answer
Immediate period.
question
The slope of a linear demand curve is the change in price _____ by the change in quantity demanded.
answer
Divided
question
The price elasticity of demand is a negative number because:
answer
Of the law of demand.
question
The _____ sign with _____ elasticity of supply indicates the direct relationship that exists between price and quantity supplied.
answer
Positive; price
question
Price elasticity of supply is a _____ number because of the law of supply.
answer
Positive
question
Cross-price elasticity of demand is a measure of the effect of a change in the:
answer
Price of one product on the quantity demand of another.
question
Price elasticity of a supply is a ______ number because of the law of supply.
answer
Positive
question
The slope of a linear demand curve is the change in price ______ by the change in quantity demanded.
answer
Divided
question
When the local florist increase the price of roses by 20%, the quantity of roses purchased decreases by 10%.
answer
Inelastic
question
When the price of gasoline decreases by 20%, the quantity of gasoline consumed increases by 4%.
answer
Inelastic
question
The quantity of eggs purchased increases by 20% when the price of eggs decrease by 8%.
answer
Elastic
question
Your neighborhood gym offered a 50% discount on new memberships last month, and the number of new memberships increased by 50%.
answer
Unit-elastic
question
The ______ of a linear demand curve is constant along the curve.
answer
Slope
question
When the product price falls from $90 to $80, the quantity demanded rises from 600 to 700 units. The ______ in this range is -0.1.
answer
Slope
question
When the product price falls from $40 to $30, the quantity demanded rises from 500 to 600 units. Using the midpoint formula, the price elasticity of demand in this range is:
answer
-0.636
question
The upper range of a linear demand curve is relatively _____ elastic.
answer
More
question
The _____ the change in price, the less reliable the elasticity estimate is going to be.
answer
More
question
The _____ range of a linear demand curve is relatively more elastic.
answer
Upper
question
Which of the following statements is true?
answer
A relationship exists between slope and elasticity, but they are not the same thing.
question
The price elasticity of demand ______ as you move along the demand curve.
answer
Changes
question
If demand is elastic, _____ prices will decrease total revenue.
answer
Increasing
question
Using absolute values, in the elastic range of the demand curve:
answer
% change in quantity demanded > % change in price.
question
Using absolute values, the inelastic range of the demand curve:
answer
% change in quantity demanded < % change in price.
question
If demand is inelastic, increasing prices will _____ total revenue.
answer
Increase
question
Relatively elastic demand curves tend to be _____ than relatively inelastic demand curves.
answer
Flatter
question
With cross-price elasticity of demand:
answer
The sign helps determine whether the goods or services are substitutes or complements.
question
If the price of a good A increases and generates an increase in the quantity of good B demanded, then the two goods are ______.
answer
Substitutes
question
With cross-price elasticity of demand:
answer
Positive value indicates substitutes, and negative value indicates complements.
question
When two goods are complements, if the price of good A increase, it generates a _____ in the demand for good B.
answer
Decrease
question
If supply is relatively inelastic, firms are relatively ______ responsive to an increase in price.
answer
Less
question
When supply changes, if the demand is relatively inelastic, the demand curves will tend to be _______ (flatter or steeper) than if the demand is relatively elastic.
answer
Steeper
question
Relatively elastic demand curves tend to be _____ (flatter or steeper) than relatively inelastic demand curves.
answer
Flatter
question
When considering different time periods:
answer
We are essentially viewing the same market from three different time-period perspectives.
question
When the proportion of income spent on a good or service is relatively _____, demand is relatively more inelastic.
answer
Small
question
When the proportion of income spent on a good or service is relatively _____, demand is relative more elastic.
answer
Large
question
When demand is inelastic:
answer
It is easier for firms to raise prices to increase total revenue.
question
When demand is _____, consumers are less responsive to changes in price.
answer
Inelastic
question
Price elasticity of demand is influenced by the _____ income spent on a good or service.
answer
Proportion of
question
When the proportion of income spent on a good or service is relatively small, demand is relatively more _____.
answer
Inelastic
question
The effect on policies will change over time as supply become relatively more _____.
answer
Elastic
question
If the price of good A increase and generates a decrease in the quantity of good B demanded, then the two goods are _____.
answer
Complements
question
Price elasticity of supply is a measure of how responsive:
answer
Quantity supplied is to a change in price.
question
When two goods are _____, the cross-price elasticity of demand is negative.
answer
Complements
question
A cross-price elasticity of demand of -1.25 means that if the price increase by 10%, the quantity demanded will _____ by _____%.
answer
Decrease; 12.5%
question
A cross-price elasticity of demand of 0.75 means that if the price of good A increase by 10% , the quantity demanded of good B will _____ by _____ %.
answer
Increase; 7.5%
question
An income elastic of demand of -1.25 means that if income increase by 1%, the quantity demanded will _____ by _____%.
answer
Decreases; 1.25%
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
