question
Question 1
1 / 1 pts
Price elasticity of demand measures
how responsive sales are to a change in buyers' incomes.
how responsive suppliers are to price changes.
how responsive quantity demanded is to a change in price.
how responsive sales are to changes in the price of a related good.
1 / 1 pts
Price elasticity of demand measures
how responsive sales are to a change in buyers' incomes.
how responsive suppliers are to price changes.
how responsive quantity demanded is to a change in price.
how responsive sales are to changes in the price of a related good.
answer
how responsive quantity demanded is to a change in price.
question
Question 2
1 / 1 pts
If the percentage increase in price is 15 percent and the value of the price elasticity of demand is -3, then quantity demanded
will decrease by 5 percent.
will decrease by 45 percent.
will increase by 45 percent.
will increase by 5 percent.
1 / 1 pts
If the percentage increase in price is 15 percent and the value of the price elasticity of demand is -3, then quantity demanded
will decrease by 5 percent.
will decrease by 45 percent.
will increase by 45 percent.
will increase by 5 percent.
answer
will decrease by 45 percent.
question
Question 3
1 / 1 pts
Suppose the value of the price elasticity of demand is -3. What does this mean?
A 1 percent increase in the price of the good causes quantity demanded to increase by 3 percent.
A $1 increase in price causes quantity demanded to fall by 3 units.
A 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent.
A 3 percent increase in the price of the good causes quantity demanded to decrease by 1 percent.
1 / 1 pts
Suppose the value of the price elasticity of demand is -3. What does this mean?
A 1 percent increase in the price of the good causes quantity demanded to increase by 3 percent.
A $1 increase in price causes quantity demanded to fall by 3 units.
A 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent.
A 3 percent increase in the price of the good causes quantity demanded to decrease by 1 percent.
answer
A 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent.
question
Question 4
1 / 1 pts
If demand is inelastic, the absolute value of the price elasticity of demand is
greater than one.
less than one.
one.
greater than the absolute value of the slope of the demand curve.
1 / 1 pts
If demand is inelastic, the absolute value of the price elasticity of demand is
greater than one.
less than one.
one.
greater than the absolute value of the slope of the demand curve.
answer
less than one.
question
Question 5
1 / 1 pts
A demand curve which is ________ represents perfectly inelastic demand, and a demand curve which is ________ represents inelastic demand.
horizontal downward sloping
upward sloping horizontal
vertical downward sloping
downward sloping vertical
1 / 1 pts
A demand curve which is ________ represents perfectly inelastic demand, and a demand curve which is ________ represents inelastic demand.
horizontal downward sloping
upward sloping horizontal
vertical downward sloping
downward sloping vertical
answer
vertical downward sloping
question
Question 6
1 / 1 pts
If demand is perfectly inelastic, the absolute value of the price elasticity of demand is
less than one.
zero.
more than one.
equal to the absolute value of the slope of the demand curve.
1 / 1 pts
If demand is perfectly inelastic, the absolute value of the price elasticity of demand is
less than one.
zero.
more than one.
equal to the absolute value of the slope of the demand curve.
answer
zero
question
Question 7
1 / 1 pts
If 50 units are sold at a price of $20 and 80 units are sold at a price of $15, what is the absolute value of the price elasticity of demand? Use the midpoint formula.
0.17
0.62
1.62
5
1 / 1 pts
If 50 units are sold at a price of $20 and 80 units are sold at a price of $15, what is the absolute value of the price elasticity of demand? Use the midpoint formula.
0.17
0.62
1.62
5
answer
1.62
question
Question 8
1 / 1 pts
Figure 6-4
Refer to Figure 6-4. The inelastic segment of the demand curve
is coincident with the horizontal axis.
lies above the midpoint of the curve.
is coincident with the vertical axis.
lies below the midpoint of the curve.
1 / 1 pts
Figure 6-4
Refer to Figure 6-4. The inelastic segment of the demand curve
is coincident with the horizontal axis.
lies above the midpoint of the curve.
is coincident with the vertical axis.
lies below the midpoint of the curve.
answer
lies below the midpoint of the curve.
question
Question 9
1 / 1 pts
If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is
relatively elastic.
relatively inelastic.
unit-elastic.
perfectly elastic.
1 / 1 pts
If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is
relatively elastic.
relatively inelastic.
unit-elastic.
perfectly elastic.
answer
relatively inelastic.
question
Question 10
1 / 1 pts
At a price of $8 per dozen, Chuy sells 40 dozen homemade tamales per week. When he raised her price to $12 per dozen, he still sold 40 dozen per week. Based on this information, the demand for his tamales is
perfectly inelastic.
unit-elastic.
inelastic.
perfectly elastic.
1 / 1 pts
At a price of $8 per dozen, Chuy sells 40 dozen homemade tamales per week. When he raised her price to $12 per dozen, he still sold 40 dozen per week. Based on this information, the demand for his tamales is
perfectly inelastic.
unit-elastic.
inelastic.
perfectly elastic.
answer
perfectly inelastic.
question
Question 11
1 / 1 pts
When there few close substitutes available for a good, demand tends to be
perfectly elastic.
relatively elastic.
relatively inelastic.
perfectly inelastic.
1 / 1 pts
When there few close substitutes available for a good, demand tends to be
perfectly elastic.
relatively elastic.
relatively inelastic.
perfectly inelastic.
answer
relatively inelastic.
question
Question 12
1 / 1 pts
A demand curve that is horizontal indicates that the commodity
is a necessity.
has a large number of substitutes.
must be very cheap.
has few substitutes.
1 / 1 pts
A demand curve that is horizontal indicates that the commodity
is a necessity.
has a large number of substitutes.
must be very cheap.
has few substitutes.
answer
has a large number of substitutes.
question
Question 13
1 / 1 pts
The demand for all carbonated beverages is likely to be ________ the demand for Dr. Pepper.
perfectly elastic compared to
more elastic than
less elastic than
perfectly inelastic compared to
1 / 1 pts
The demand for all carbonated beverages is likely to be ________ the demand for Dr. Pepper.
perfectly elastic compared to
more elastic than
less elastic than
perfectly inelastic compared to
answer
less elastic than
question
Question 14
1 / 1 pts
The demand for gasoline in the short run is
unit-elastic because people tend to consume a stable amount of gasoline per period.
inelastic because there are no good substitutes for gasoline.
elastic because people can easily switch to public transportation.
perfectly inelastic because people have no choice but to buy gasoline.
1 / 1 pts
The demand for gasoline in the short run is
unit-elastic because people tend to consume a stable amount of gasoline per period.
inelastic because there are no good substitutes for gasoline.
elastic because people can easily switch to public transportation.
perfectly inelastic because people have no choice but to buy gasoline.
answer
inelastic because there are no good substitutes for gasoline.
question
Question 15
1 / 1 pts
In general, a "big ticket item" such as a house or new car will
tend to have a more inelastic demand the more time that passes.
tend to have an inelastic demand because it has many substitutes.
tend to have a more elastic demand than a lower priced good.
tend to have an inelastic demand because spending on the item takes up a large share of the average consumer's budget.
1 / 1 pts
In general, a "big ticket item" such as a house or new car will
tend to have a more inelastic demand the more time that passes.
tend to have an inelastic demand because it has many substitutes.
tend to have a more elastic demand than a lower priced good.
tend to have an inelastic demand because spending on the item takes up a large share of the average consumer's budget.
answer
tend to have a more elastic demand than a lower priced good
question
Question 16
1 / 1 pts
Total revenue equals
price per unit times quantity supplied.
price per unit times quantity sold.
price per unit times change in quantity sold.
change in price per unit times quantity sold.
1 / 1 pts
Total revenue equals
price per unit times quantity supplied.
price per unit times quantity sold.
price per unit times change in quantity sold.
change in price per unit times quantity sold.
answer
price per unit times quantity sold.
question
Question 17
1 / 1 pts
When demand is elastic, a fall in price causes total revenue to rise because
the increase in quantity sold is large enough to offset the lower price.
when price falls, quantity sold increases so total revenue automatically rises.
the percentage increase in quantity demanded is less than the percentage fall in price.
the demand curve shifts.
1 / 1 pts
When demand is elastic, a fall in price causes total revenue to rise because
the increase in quantity sold is large enough to offset the lower price.
when price falls, quantity sold increases so total revenue automatically rises.
the percentage increase in quantity demanded is less than the percentage fall in price.
the demand curve shifts.
answer
the increase in quantity sold is large enough to offset the lower price.
question
Question 18
1 / 1 pts
If a firm lowered the price of the product it sells and found that total revenue did not change, then the demand for its product is
perfectly elastic.
perfectly inelastic.
unit-elastic.
relatively elastic.
1 / 1 pts
If a firm lowered the price of the product it sells and found that total revenue did not change, then the demand for its product is
perfectly elastic.
perfectly inelastic.
unit-elastic.
relatively elastic.
answer
unit-elastic.
question
Question 19
1 / 1 pts
If the price elasticity of demand for canned soup is estimated at -1.62. What happens to sales revenue if the price of canned soup rises?
It rises.
It falls by 162 percent.
It rises by 1.62 percent.
It falls.
1 / 1 pts
If the price elasticity of demand for canned soup is estimated at -1.62. What happens to sales revenue if the price of canned soup rises?
It rises.
It falls by 162 percent.
It rises by 1.62 percent.
It falls.
answer
It falls.
question
Question 20
1 / 1 pts
Which of the following statements is true?
When a firm lowers its price its total revenue may either increase or decrease.
Whenever a firm increases its quantity sold its revenue will increase.
Total revenue will equal zero when the demand for a product is unit-elastic.
Whenever a firm raises its price its total revenue will increase.
1 / 1 pts
Which of the following statements is true?
When a firm lowers its price its total revenue may either increase or decrease.
Whenever a firm increases its quantity sold its revenue will increase.
Total revenue will equal zero when the demand for a product is unit-elastic.
Whenever a firm raises its price its total revenue will increase.
answer
When a firm lowers its price its total revenue may either increase or decrease.
question
Question 21
1 / 1 pts
Income elasticity measures
how a good's quantity demanded responds to producers' incomes.
how a good's quantity demanded responds to change in the goods price.
how a good's quantity demanded responds to change in buyers' incomes.
how a good's quantity demanded responds to change in the price of another good.
1 / 1 pts
Income elasticity measures
how a good's quantity demanded responds to producers' incomes.
how a good's quantity demanded responds to change in the goods price.
how a good's quantity demanded responds to change in buyers' incomes.
how a good's quantity demanded responds to change in the price of another good.
answer
how a good's quantity demanded responds to change in buyers' incomes.
question
Question 22
1 / 1 pts
Calculate the income elasticity if an 8 percent increase in income leads to a 4 percent increase in quantity demanded for organic produce.
-0.66
0.5
1.5
2
1 / 1 pts
Calculate the income elasticity if an 8 percent increase in income leads to a 4 percent increase in quantity demanded for organic produce.
-0.66
0.5
1.5
2
answer
0.5
question
Question 23
1 / 1 pts
The income elasticity of demand measures
how a consumer's purchasing power is affected by a change in the price of a product.
the income effect of a change in price.
the responsiveness of quantity demanded to changes in income.
the percentage change in the price of a product divided by the percentage change in consumer income.
1 / 1 pts
The income elasticity of demand measures
how a consumer's purchasing power is affected by a change in the price of a product.
the income effect of a change in price.
the responsiveness of quantity demanded to changes in income.
the percentage change in the price of a product divided by the percentage change in consumer income.
answer
the responsiveness of quantity demanded to changes in income.
question
Question 24
1 / 1 pts
If the cross-price elasticity of demand between Breeze Detergent and Faber Detergent is a relatively large positive number, then it indicates that
consumers have a distinct preference for one brand versus the other.
the two brands are probably made by the same company.
the two brands of detergent are close substitutes.
detergents are necessities.
1 / 1 pts
If the cross-price elasticity of demand between Breeze Detergent and Faber Detergent is a relatively large positive number, then it indicates that
consumers have a distinct preference for one brand versus the other.
the two brands are probably made by the same company.
the two brands of detergent are close substitutes.
detergents are necessities.
answer
the two brands of detergent are close substitutes.
question
Question 25
1 / 1 pts
If a good has a negative income elasticity of demand, this indicates that the good is
a substitute with another good.
a complement with another good.
normal.
inferior.
1 / 1 pts
If a good has a negative income elasticity of demand, this indicates that the good is
a substitute with another good.
a complement with another good.
normal.
inferior.
answer
inferior
question
Question 26
1 / 1 pts
If a 5 percent increase in income leads to a 10 percent increase in quantity demanded for airline travel, then airline travel is
a substitute for another good.
an inferior good.
a luxury.
a necessity.
1 / 1 pts
If a 5 percent increase in income leads to a 10 percent increase in quantity demanded for airline travel, then airline travel is
a substitute for another good.
an inferior good.
a luxury.
a necessity.
answer
a luxury.
question
Question 27
1 / 1 pts
The cross-price elasticity of demand measures the
percentage change in the quantity demanded of one good divided by the percentage change in the price of another good.
percentage change in the quantity demanded of one good in one location divided by the price of the same good in another location.
absolute change in the quantity demanded of one good divided by the absolute change in the price of another good.
percentage change in the price of one good divided by the percentage change in the quantity demanded of another good.
1 / 1 pts
The cross-price elasticity of demand measures the
percentage change in the quantity demanded of one good divided by the percentage change in the price of another good.
percentage change in the quantity demanded of one good in one location divided by the price of the same good in another location.
absolute change in the quantity demanded of one good divided by the absolute change in the price of another good.
percentage change in the price of one good divided by the percentage change in the quantity demanded of another good.
answer
percentage change in the quantity demanded of one good divided by the percentage change in the price of another good.
question
Question 28
1 / 1 pts
Figure 6-1
Refer to Figure 6-1. The demand curve on which elasticity changes at every point is given in
Panel A
Panel B
Panel C
none of the above graphs.
1 / 1 pts
Figure 6-1
Refer to Figure 6-1. The demand curve on which elasticity changes at every point is given in
Panel A
Panel B
Panel C
none of the above graphs.
answer
Panel C
question
Question 29
1 / 1 pts
Figure 6-1
Refer to Figure 6-1. A perfectly elastic demand curve is shown in
Panel A
Panel B
Panel C
Panel D
1 / 1 pts
Figure 6-1
Refer to Figure 6-1. A perfectly elastic demand curve is shown in
Panel A
Panel B
Panel C
Panel D
answer
Panel B
question
Question 30
1 / 1 pts
Figure 6-1
Refer to Figure 6-1. A perfectly inelastic demand curve is shown in
Panel A
Panel B
Panel C
Panel D
1 / 1 pts
Figure 6-1
Refer to Figure 6-1. A perfectly inelastic demand curve is shown in
Panel A
Panel B
Panel C
Panel D
answer
Panel A
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