Question 1

If demand is unit elastic,a price reduction will _____

Accepted Answer

A)  increase revenues.
B)  reduce revenues.
C)  reduce total cost.
D)  have no effect on revenues.
E)  increase profits.

Question 2

The supply of a product will be more elastic if _____

Accepted Answer

A)  the good has few substitutes.
B)  the time the producer has to adjust to a price change is long.
C)  the time frame for adjusting to price changes is short.
D)  demand is elastic.
E)  demand is inelastic.

Question 3

Which of the following describes a situation in which demand must be inelastic?

Accepted Answer

A)  Total revenue decreases by 10 percent when the price of spats rises by 10 percent.
B)  Total revenue decreases by less than 10 percent when the price of spats rises by 10 percent.
C)  Total revenue increases by more than 10 percent when the price of spats rises by 10 percent.
D)  Total revenue decreases by $10 when the price of spats rises by $10.
E)  Total revenue decreases by more than $10 when the price of spats rises by $10.

Question 4

Table 5.4
   Restaurant Meals‾ Quantity  supplied  Quantity  demanded  Price 100200$10150150$20\begin{array}{l}\quad\quad\quad\quad\quad\underline{	ext { Restaurant Meals}}\\begin{array} { c c c } \begin{array} { c } 	ext { Quantity } \	ext { supplied }\end{array} & \begin{array} { c } 	ext { Quantity } \	ext { demanded }\end{array} & 	ext { Price } \\hline 100 & 200 & \$ 10 \150 & 150 & \$ 20\end{array}\end{array} Restaurant Meals​ Quantity  supplied ​100150​ Quantity  demanded ​200150​ Price $10$20​​​ 
-Refer to Table 5.4,which shows the quantity supplied and the quantity demanded for restaurant meals at different prices.Use the information to calculate the value of the price elasticity of demand for restaurant meals.

Accepted Answer

A)  ?1/2
B)  ?5/3
C)  ?3/5
D)  ?3/7
E)  ?7/3

Question 5

The price elasticity of demand helps determine the effect of price changes on a firm's _____

Accepted Answer

A)  property tax.
B)  profit.
C)  total output.
D)  total revenue.
E)  total cost.

Question 6

Elasticity rises as price falls along a linear downward-sloping demand curve.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is correct regarding total revenue?

Accepted Answer

A)  TR = p + q
B)  q = p / TR
C)  TR = p/q
D)  TR = p x q
E)  p = q / TR

Question 8

Which of the following goods will have a higher price elasticity of demand in the long run?

Accepted Answer

A)  air travel
B)  gasoline
C)  milk
D)  cars
E)  Chevrolets

Question 9

The demand for a good is elastic if _____

Accepted Answer

A)  an increase in price leads to a decrease in total revenue.
B)  an increase in price leads to an increase in total revenue.
C)  an increase in price causes no change in total revenue.
D)  a decrease in price causes no changes in total revenue.
E)  a decrease in price leads to a decrease in total revenue.

Question 10

The total revenue curve that corresponds to a downward-sloping linear demand curve _____

Accepted Answer

A)  slopes downward.
B)  slopes upward.
C)  is a horizontal line.
D)  first rises, then falls.
E)  first falls, then rises.

Question 11

Exhibit 5.10
 
-Refer to Exhibit 5.10,which shows two upward-sloping linear supply curves that pass through the origin.The price elasticity of supply between $10 and $20 on the supply curve S is _____

Accepted Answer

A)  0.
B)  infinity.
C)  1.
D)  2.
E)  10.

Question 12

What is the effect of a 10 percent price increase on total revenue if elasticity is zero?

Accepted Answer

A)  Revenue increases by 10 percent.
B)  Revenue increases by less than 10 percent.
C)  Revenue does not change.
D)  Revenue decreases.
E)  Revenue drops to 0.

Question 13

Exhibit 5.9
 1 is the most elastic; S2 is the least elastic. B) S1 is the most elastic; S3 is the least elastic. C) S3 is the most elastic; S1 is the least elastic. D) S3 is the most elastic; S2 is the least elastic. E) S2 is the most elastic; S3 is the least elastic." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 5.9,which shows three upward-sloping linear supply curves.Which of the following supply curves is the most elastic and which is the least elastic between the prices of $5 and $6?

Accepted Answer

A)  S1 is the most elastic; S2 is the least elastic.
B)  S1 is the most elastic; S3 is the least elastic.
C)  S3 is the most elastic; S1 is the least elastic.
D)  S3 is the most elastic; S2 is the least elastic.
E)  S2 is the most elastic; S3 is the least elastic.

Question 14

If quantity increases by 15 percent when prices increase 5 percent then elasticity for this product is _____

Accepted Answer

A)  15.
B)  10.
C)  5.
D)  3.
E)  1.

Question 15

What is the effect of a 10 percent price increase on quantity demanded if elasticity is equal to 1?

Accepted Answer

A)  Quantity demanded does not change.
B)  Quantity demanded drops by less than 10 percent.
C)  Quantity demanded drops by 10 percent.
D)  Quantity demanded drops by more than 10 percent.
E)  Quantity demanded drops to 0.

Question 16

If the price of Coca-Cola increases from 40 cents to 50 cents per can and the quantity demanded decreases from 100 cans to 50 cans,then the value of the price elasticity of demand for Coca-Cola is _____

Accepted Answer

A)  0.5.
B)  0.25.
C)  1.
D)  3.
E)  2.

Question 17

Exhibit 5.5
 
-Refer to Exhibit 5.5,which shows the total revenue curve for a firm.Which of the following statements is true in the range of the total revenue curve labeled A?

Accepted Answer

A)  Demand is elastic.
B)  Demand is inelastic.
C)  Demand is unit elastic.
D)  Demand is perfectly inelastic.
E)  Demand is perfectly elastic.

Question 18

What is the effect of a 10 percent price increase on quantity demanded if elasticity is larger than zero but less than 1?

Accepted Answer

A)  Quantity demanded does not change.
B)  Quantity demanded drops by less than 10 percent.
C)  Quantity demanded drops by 10 percent.
D)  Quantity demanded drops by more than 10 percent.
E)  Quantity demanded drops to 0.

Question 19

As the internet becomes a popular substitute for cable TV,the demand for cable TV is likely to _____

Accepted Answer

A)  become less price elastic.
B)  become more price elastic.
C)  increase.
D)  stay the same.
E)  become unit elastic.

Question 20

The price elasticity of demand is defined as _____

Accepted Answer

A)  the percentage change in price divided by the percentage change in quantity demanded.
B)  the percentage change in quantity demanded divided by the percentage change in price.
C)  the change in quantity demanded divided by the change in price.
D)  the change in price divided by the change in quantity demanded.
E)  the quantity demanded divided by the price.

Exam 5: Elasticity of Demand and Supply

What is the effect of a 10 percent price increase on total revenue if elasticity is zero?

Correct Answer
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The total revenue curve that corresponds to a downward-sloping linear demand curve _____

Correct Answer
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Elasticity rises as price falls along a linear downward-sloping demand curve.

Correct Answer
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Which of the following goods will have a higher price elasticity of demand in the long run?

Correct Answer
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Correct Answer
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Exhibit 5.5 -Refer to Exhibit 5.5,which shows the total revenue curve for a firm.Which of the following statements is true in the range of the total revenue curve labeled A?

Correct Answer
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What is the effect of a 10 percent price increase on quantity demanded if elasticity is larger than zero but less than 1?

Correct Answer
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If quantity increases by 15 percent when prices increase 5 percent then elasticity for this product is _____

Correct Answer
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Exhibit 5.9 -Refer to Exhibit 5.9,which shows three upward-sloping linear supply curves.Which of the following supply curves is the most elastic and which is the least elastic between the prices of $5 and $6?

Correct Answer
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As the internet becomes a popular substitute for cable TV,the demand for cable TV is likely to _____

Correct Answer
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What is the effect of a 10 percent price increase on quantity demanded if elasticity is equal to 1?

Correct Answer
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Exhibit 5.10 -Refer to Exhibit 5.10,which shows two upward-sloping linear supply curves that pass through the origin.The price elasticity of supply between $10 and $20 on the supply curve S is _____

Correct Answer
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Which of the following describes a situation in which demand must be inelastic?

Correct Answer
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The price elasticity of demand is defined as _____

Correct Answer
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If demand is unit elastic,a price reduction will _____

Correct Answer
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The supply of a product will be more elastic if _____

Correct Answer
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The demand for a good is elastic if _____

Correct Answer
verified

If the price of Coca-Cola increases from 40 cents to 50 cents per can and the quantity demanded decreases from 100 cans to 50 cans,then the value of the price elasticity of demand for Coca-Cola is _____

Correct Answer
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The price elasticity of demand helps determine the effect of price changes on a firm's _____

Correct Answer
verified

Which of the following is correct regarding total revenue?

Correct Answer
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Exam 5: Elasticity of Demand and Supply

What is the effect of a 10 percent price increase on total revenue if elasticity is zero?

Correct AnswerverifiedShow Answer

The total revenue curve that corresponds to a downward-sloping linear demand curve _____

Correct AnswerverifiedShow Answer

Elasticity rises as price falls along a linear downward-sloping demand curve.

Correct AnswerverifiedShow Answer

Which of the following goods will have a higher price elasticity of demand in the long run?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Exhibit 5.5 -Refer to Exhibit 5.5,which shows the total revenue curve for a firm.Which of the following statements is true in the range of the total revenue curve labeled A?

Correct AnswerverifiedShow Answer

What is the effect of a 10 percent price increase on quantity demanded if elasticity is larger than zero but less than 1?

Correct AnswerverifiedShow Answer

If quantity increases by 15 percent when prices increase 5 percent then elasticity for this product is _____

Correct AnswerverifiedShow Answer

Exhibit 5.9 -Refer to Exhibit 5.9,which shows three upward-sloping linear supply curves.Which of the following supply curves is the most elastic and which is the least elastic between the prices of $5 and $6?

Correct AnswerverifiedShow Answer

As the internet becomes a popular substitute for cable TV,the demand for cable TV is likely to _____

Correct AnswerverifiedShow Answer

What is the effect of a 10 percent price increase on quantity demanded if elasticity is equal to 1?

Correct AnswerverifiedShow Answer

Exhibit 5.10 -Refer to Exhibit 5.10,which shows two upward-sloping linear supply curves that pass through the origin.The price elasticity of supply between $10 and $20 on the supply curve S is _____

Correct AnswerverifiedShow Answer

Which of the following describes a situation in which demand must be inelastic?

Correct AnswerverifiedShow Answer

The price elasticity of demand is defined as _____

Correct AnswerverifiedShow Answer

If demand is unit elastic,a price reduction will _____

Correct AnswerverifiedShow Answer

The supply of a product will be more elastic if _____

Correct AnswerverifiedShow Answer

The demand for a good is elastic if _____

Correct AnswerverifiedShow Answer

If the price of Coca-Cola increases from 40 cents to 50 cents per can and the quantity demanded decreases from 100 cans to 50 cans,then the value of the price elasticity of demand for Coca-Cola is _____

Correct AnswerverifiedShow Answer

The price elasticity of demand helps determine the effect of price changes on a firm's _____

Correct AnswerverifiedShow Answer

Which of the following is correct regarding total revenue?

Correct AnswerverifiedShow Answer

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