question
A good like a medicine without any close substitutes will tend to have:
a. a large elasticity of demand.
b. a small elasticity of demand.
c. a small elasticity of supply.
d. a large elasticity of supply.
a. a large elasticity of demand.
b. a small elasticity of demand.
c. a small elasticity of supply.
d. a large elasticity of supply.
answer
B
question
If demand is price elastic:
a. a 1 percent decrease in the price leads to an increase in the quantity demanded that exceeds 1 percent.
b. a 1 percent increase in the price leads to an increase in the quantity demanded that exceeds 1 percent.
c. a 1 percent decrease in the price leads to a decrease in the quantity demanded that is less than 1 percent.
d. the price is very sensitive to any shift of the supply curve.
a. a 1 percent decrease in the price leads to an increase in the quantity demanded that exceeds 1 percent.
b. a 1 percent increase in the price leads to an increase in the quantity demanded that exceeds 1 percent.
c. a 1 percent decrease in the price leads to a decrease in the quantity demanded that is less than 1 percent.
d. the price is very sensitive to any shift of the supply curve.
answer
A
question
The demand for DVD's is unit elastic if:
a) a 30 percent increase in the price leads to a 30 percent decrease in the quantity demanded.
b) a 10 percent decrease in the price leads to an infinite increase in the quantity demanded.
c) any increase in the price leads to a 1 percent decrease in the quantity demanded.
d) a 10 percent increase in the price leads to a 10 percent increase in total revenue.
a) a 30 percent increase in the price leads to a 30 percent decrease in the quantity demanded.
b) a 10 percent decrease in the price leads to an infinite increase in the quantity demanded.
c) any increase in the price leads to a 1 percent decrease in the quantity demanded.
d) a 10 percent increase in the price leads to a 10 percent increase in total revenue.
answer
A
question
Demand is perfectly inelastic when:
a) shifts in the supply curve results in no change in price.
b) the good in question has perfect substitutes.
c) shifts of the supply curve results in no change in quantity demanded.
d) shifts of the supply curve results in no change in the total revenue from sales.
a) shifts in the supply curve results in no change in price.
b) the good in question has perfect substitutes.
c) shifts of the supply curve results in no change in quantity demanded.
d) shifts of the supply curve results in no change in the total revenue from sales.
answer
C
question
A good with a horizontal demand curve has a demand with:
a) unit elasticity.
b) infinite elasticity.
c) zero elasticity.
d) varying elasticity.
a) unit elasticity.
b) infinite elasticity.
c) zero elasticity.
d) varying elasticity.
answer
B
question
Which of the following factors will indicate that good is elastic?
a. small number of substitutes.
b. this good is a necessary good.
c. the market for this good is narrowly defined.
d. you consider this good in the short-run.
a. small number of substitutes.
b. this good is a necessary good.
c. the market for this good is narrowly defined.
d. you consider this good in the short-run.
answer
C
question
Which of the following factors will indicate that good is inelastic?
a. big number of substitutes.
b. this good is a necessary good.
c. the market for this good is narrowly defined.
d. you consider this good in the long-run.
a. big number of substitutes.
b. this good is a necessary good.
c. the market for this good is narrowly defined.
d. you consider this good in the long-run.
answer
B
question
The elasticity of demand for Samsung galaxy phones is probably:
a. inelastic and smaller than the elasticity of demand for phones overall.
b. elastic and smaller than the elasticity of demand for phones overall.
c. inelastic but larger than the elasticity of demand for phones overall.
d. elastic and larger than the elasticity of demand for phones overall.
a. inelastic and smaller than the elasticity of demand for phones overall.
b. elastic and smaller than the elasticity of demand for phones overall.
c. inelastic but larger than the elasticity of demand for phones overall.
d. elastic and larger than the elasticity of demand for phones overall.
answer
D
question
Suppose we consider a good with price elasticity of demand equal to 1.5. If the price of this good falls, total revenue will:
a. increase because demand is elastic.
b. decrease because demand is elastic.
c. increase because demand is inelastic.
d. decrease because demand is inelastic.
a. increase because demand is elastic.
b. decrease because demand is elastic.
c. increase because demand is inelastic.
d. decrease because demand is inelastic.
answer
A
question
An increase in the supply of a good will decrease the total revenue producers receive if
a. the demand curve is inelastic.
b. the demand curve is elastic.
c. the supply curve is inelastic.
d. the supply curve is elastic.
a. the demand curve is inelastic.
b. the demand curve is elastic.
c. the supply curve is inelastic.
d. the supply curve is elastic.
answer
A
question
Producers' total revenue will increase if:
a. income increases and the good is an inferior good.
b. the price rises and demand is elastic.
c. the price rises and demand is inelastic.
d. income falls and the good is a normal good.
a. income increases and the good is an inferior good.
b. the price rises and demand is elastic.
c. the price rises and demand is inelastic.
d. income falls and the good is a normal good.
answer
C
question
Demand for normal good is income elastic if:
a. a large percentage increase in income will result in a small percentage increase in Qd.
b. a small percentage increase in income will result in a large percentage increase in Qd .
c. an increase in income will not affect the Qd .
d. the good in question has close substitutes.
a. a large percentage increase in income will result in a small percentage increase in Qd.
b. a small percentage increase in income will result in a large percentage increase in Qd .
c. an increase in income will not affect the Qd .
d. the good in question has close substitutes.
answer
B
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