Question 1

Use the following to answer question(s) : 
-(Exhibit: Demand and Price Elasticity 1)  What is the price elasticity of demand between $1.75 and $1.50?

Accepted Answer

A)   -0.42
B)   -1.5
C)   -1.86
D)   none of the above

Question 2

If the price of a good is increased by 15 percent and the quantity demanded falls by 20 percent, the price elasticity of demand is:

Accepted Answer

A)   price elastic.
B)   price inelastic.
C)   unit price elastic.
D)   normal.

Question 3

For a normal good, income elasticity of demand will be:

Accepted Answer

A)   negative.
B)   positive.
C)   zero.
D)   determined by the direction of the change in income.

Question 4

Which factor is the most important in determining the price elasticity of supply?

Accepted Answer

A)   the number of close substitutes
B)   the time period the producer has to adjust inputs and outputs
C)   the intensity of the need on behalf of consumers
D)   the number of alternative uses of the good

Question 5

To say that two goods are substitutes, their cross price elasticities of demand should be:

Accepted Answer

A)   less than zero.
B)   negative, yet almost equal to zero.
C)   equal to zero.
D)   greater than zero.

Question 6

The income elasticity of demand for ground beef has been estimated to be -0.197.If income falls by 10 percent in a period, how will that affect total expenditures on ground beef in that period, all other things unchanged?

Accepted Answer

A)   total expenditures will rise
B)   total expenditures will remain unchanged
C)   total expenditures will fall
D)   not enough information is given to answer the question

Question 7

The cross price elasticity of demand for fuel with respect to the price of transport (e.g., automobile travel including insurance, etc.)  has been estimated to be -0.48.If the price of transport increases by 5 percent in a period, how will that affect the demand for fuel in that period, all other things unchanged?

Accepted Answer

A)   The demand for fuel will increase by 2.4 percent.
B)   The demand for fuel will increase by 5 percent.
C)   The demand for fuel will not change because many people prefer to ride the subway.
D)   The demand for fuel will fall.

Question 8

If the demand for golf is price inelastic and your local public golf course increases the greens fees for using the course, you would expect:

Accepted Answer

A)   a decrease in total revenue received by the course.
B)   an increase in total revenue received by the course.
C)   an increase in the amount of golf played on the course.
D)   no change in the amount of golf played on the course.

Question 9

Use the following for questions 108-115.
Exhibit: The Demand for Bungalow Bob's Bagels
 
-(Exhibit: The Demand for Bungalow Bob's Bagels)  Demand is price inelastic between:

Accepted Answer

A)   $0.40 and $0.50.
B)   $0.50 and $0.60.
C)   $0.60 and $0.70.
D)   $0.70 and $0.80.

Question 10

If changes in price and total revenue move in opposite directions, then demand is price inelastic in that portion of the demand curve.

Accepted Answer

A) True 
 B)False

Question 11

The cross price elasticity of demand of substitute goods is:

Accepted Answer

A)   between -1 and 0.
B)   less than 0.
C)   equal to 0.
D)   greater than 0.

Question 12

Use the following for questions 124-127.
Exhibit: Estimating Price Elasticity
 
-(Exhibit: Estimating Price Elasticity)  The demand curve D₄ shows that:

Accepted Answer

A)   there is no change in quantity demanded in response to a price change.
B)   there is a quantity response only to a price decrease.
C)   demand is perfectly price elastic.
D)   demand is price elastic only in response to a price increase.

Question 13

If the price elasticity of demand is found to be -3/4, then demand is:

Accepted Answer

A)   price inelastic.
B)   price elastic.
C)   unit price elastic.
D)   positively sloped.

Question 14

Income elasticity of demand measures:

Accepted Answer

A)   how much quantity demanded changes in response to a price change.
B)   how much a consumer can buy at given income levels.
C)   how much consumer purchasing power is affected when prices change.
D)   how demand for a good changes in response to changes in income.

Question 15

Use the following to answer question(s) : Demand and Price Elasticity 2
 
-(Exhibit: Demand and Price Elasticity 2)  The price elasticity of demand between points B and C is:

Accepted Answer

A)   -1.0.
B)   -1.67.
C)   -3.0.
D)   none of the above.

Question 16

A linear demand curve will have a price elasticity of demand whose absolute value:

Accepted Answer

A)   increases as price decreases.
B)   decreases as price decreases.
C)   is constant.
D)   is -1 at all prices.

Question 17

Discuss and explain normal and inferior goods using the concept of income elasticity of demand.

Accepted Answer

Normal goods and inferior goods are two ...

Question 18

A unit price elastic demand exists if a 10 percent change in the price of a good results in a percentage change (in absolute value terms)  in quantity demanded that is:

Accepted Answer

A)   less than 0.
B)   greater than 0 but less than 10.
C)   equal to 10.
D)   greater than 10.

Question 19

The price elasticity of demand for gasoline in the short run has been estimated to be -0.1.If a war in the Middle East causes the price of oil (from which gasoline is made)  to increase, how will that affect total expenditures on gasoline in the short run, all other things unchanged?

Accepted Answer

A)   demand will stay the same, but total expenditures will fall
B)   demand will decrease, but total expenditures will rise
C)   total expenditures will remain unchanged
D)   demand will not change, but total expenditures will rise

Question 20

The price elasticity of demand for milk has been estimated to be somewhere between -0.49 and -0.63.If a new system of feeding and milking cows yields a 15 percent increase in the production of milk throughout the country, how will that affect total expenditures on milk, all other things unchanged?

Accepted Answer

A)   total expenditures will remain unchanged
B)   total expenditures will fall
C)   total expenditures will rise
D)   not enough information is given to answer the question

Exam 5: Elasticity: a Measure of Response

For a normal good, income elasticity of demand will be:

Correct Answer
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Use the following for questions 108-115. Exhibit: The Demand for Bungalow Bob's Bagels -(Exhibit: The Demand for Bungalow Bob's Bagels) Demand is price inelastic between:

Correct Answer
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To say that two goods are substitutes, their cross price elasticities of demand should be:

Correct Answer
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If the price elasticity of demand is found to be -3/4, then demand is:

Correct Answer
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The income elasticity of demand for ground beef has been estimated to be -0.197.If income falls by 10 percent in a period, how will that affect total expenditures on ground beef in that period, all other things unchanged?

Correct Answer
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The price elasticity of demand for milk has been estimated to be somewhere between -0.49 and -0.63.If a new system of feeding and milking cows yields a 15 percent increase in the production of milk throughout the country, how will that affect total expenditures on milk, all other things unchanged?

Correct Answer
verified

If the price of a good is increased by 15 percent and the quantity demanded falls by 20 percent, the price elasticity of demand is:

Correct Answer
verified

Use the following to answer question(s) : -(Exhibit: Demand and Price Elasticity 1) What is the price elasticity of demand between $1.75 and $1.50?

Correct Answer
verified

Discuss and explain normal and inferior goods using the concept of income elasticity of demand.

Correct Answer
Answered by ExamLex AI
Normal goods and inferior goods are two ...
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If changes in price and total revenue move in opposite directions, then demand is price inelastic in that portion of the demand curve.

Correct Answer
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Income elasticity of demand measures:

Correct Answer
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Correct Answer
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Which factor is the most important in determining the price elasticity of supply?

Correct Answer
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Use the following to answer question(s) : Demand and Price Elasticity 2 -(Exhibit: Demand and Price Elasticity 2) The price elasticity of demand between points B and C is:

Correct Answer
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A unit price elastic demand exists if a 10 percent change in the price of a good results in a percentage change (in absolute value terms) in quantity demanded that is:

Correct Answer
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The cross price elasticity of demand of substitute goods is:

Correct Answer
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The price elasticity of demand for gasoline in the short run has been estimated to be -0.1.If a war in the Middle East causes the price of oil (from which gasoline is made) to increase, how will that affect total expenditures on gasoline in the short run, all other things unchanged?

Correct Answer
verified

A linear demand curve will have a price elasticity of demand whose absolute value:

Correct Answer
verified

If the demand for golf is price inelastic and your local public golf course increases the greens fees for using the course, you would expect:

Correct Answer
verified

Use the following for questions 124-127. Exhibit: Estimating Price Elasticity -(Exhibit: Estimating Price Elasticity) The demand curve D₄ shows that:

Correct Answer
verified

Exam 5: Elasticity: a Measure of Response

For a normal good, income elasticity of demand will be:

Correct AnswerverifiedShow Answer

Use the following for questions 108-115. Exhibit: The Demand for Bungalow Bob's Bagels -(Exhibit: The Demand for Bungalow Bob's Bagels) Demand is price inelastic between:

Correct AnswerverifiedShow Answer

To say that two goods are substitutes, their cross price elasticities of demand should be:

Correct AnswerverifiedShow Answer

If the price elasticity of demand is found to be -3/4, then demand is:

Correct AnswerverifiedShow Answer

The income elasticity of demand for ground beef has been estimated to be -0.197.If income falls by 10 percent in a period, how will that affect total expenditures on ground beef in that period, all other things unchanged?

Correct AnswerverifiedShow Answer

The price elasticity of demand for milk has been estimated to be somewhere between -0.49 and -0.63.If a new system of feeding and milking cows yields a 15 percent increase in the production of milk throughout the country, how will that affect total expenditures on milk, all other things unchanged?

Correct AnswerverifiedShow Answer

If the price of a good is increased by 15 percent and the quantity demanded falls by 20 percent, the price elasticity of demand is:

Correct AnswerverifiedShow Answer

Use the following to answer question(s) : -(Exhibit: Demand and Price Elasticity 1) What is the price elasticity of demand between $1.75 and $1.50?

Correct AnswerverifiedShow Answer

Discuss and explain normal and inferior goods using the concept of income elasticity of demand.

Correct AnswerAnswered by ExamLex AINormal goods and inferior goods are two ...View AnswerShow Answer

If changes in price and total revenue move in opposite directions, then demand is price inelastic in that portion of the demand curve.

Correct AnswerverifiedShow Answer

Income elasticity of demand measures:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which factor is the most important in determining the price elasticity of supply?

Correct AnswerverifiedShow Answer

Use the following to answer question(s) : Demand and Price Elasticity 2 -(Exhibit: Demand and Price Elasticity 2) The price elasticity of demand between points B and C is:

Correct AnswerverifiedShow Answer

A unit price elastic demand exists if a 10 percent change in the price of a good results in a percentage change (in absolute value terms) in quantity demanded that is:

Correct AnswerverifiedShow Answer

The cross price elasticity of demand of substitute goods is:

Correct AnswerverifiedShow Answer

The price elasticity of demand for gasoline in the short run has been estimated to be -0.1.If a war in the Middle East causes the price of oil (from which gasoline is made) to increase, how will that affect total expenditures on gasoline in the short run, all other things unchanged?

Correct AnswerverifiedShow Answer

A linear demand curve will have a price elasticity of demand whose absolute value:

Correct AnswerverifiedShow Answer

If the demand for golf is price inelastic and your local public golf course increases the greens fees for using the course, you would expect:

Correct AnswerverifiedShow Answer

Use the following for questions 124-127. Exhibit: Estimating Price Elasticity -(Exhibit: Estimating Price Elasticity) The demand curve D₄ shows that:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
Answered by ExamLex AI
Normal goods and inferior goods are two ...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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