Question 1

Figure 5-2
 
-Refer to Figure 5-2.Sellers' total revenue would increase if the price

Accepted Answer

A)  increased from $4 to $6.
B)  increased from $16 to $18.
C)  decreased from $8 to $6.
D)  All of the above are correct.E) All of the above
F) B) and D)

Question 2

Elasticity of demand is closely related to the slope of the demand curve.The more responsive buyers are to a change in price,the

Accepted Answer

A)  steeper the demand curve will be.
B)  flatter the demand curve will be.
C)  further to the right the demand curve will sit.
D)  closer to the vertical axis the demand curve will sit.E) A) and B)
F) A) and C)

Question 3

If a change in the price of a good results in no change in total revenue,then

Accepted Answer

A)  the demand for the good must be elastic.
B)  the demand for the good must be inelastic.
C)  the demand for the good must be unit elastic.
D)  buyers must not respond very much to a change in price.E) B) and C)
F) All of the above

Question 4

When quantity moves proportionately the same amount as price,demand is

Accepted Answer

A)  elastic and the price elasticity of demand is 1.
B)  perfectly elastic and the price elasticity of demand is infinitely large.
C)  perfectly inelastic and the price elasticity of demand is 0.
D)  unit elastic and the price elasticity of demand is 1.E) B) and C)
F) A) and C)

Question 5

Figure 5-10
 
-Refer to Figure 5-10.If,holding the supply curve fixed,there were an increase in demand that caused the equilibrium price to increase from $6 to $8,then sellers' total revenue would

Accepted Answer

A)  increase.
B)  decrease.
C)  remain unchanged.
D)  The effect on total revenue cannot be determined from the given information.E) A) and D)
F) A) and C)

Question 6

Table 5-1
 
-Refer to Table 5-1.Using the midpoint method,the income elasticity of demand for good Y is

Accepted Answer

A)  2.33 and good Y is a normal good.
B)  -2.33 and Y is an inferior good.
C)  -0.43 and Y is an inferior good.
D)  -0.43 and Y is a law-of-demand good.E) A) and B)
F) B) and D)

Question 7

Figure 5-8. A demand curve is shown on the graph below. On the graph, Q represents quantity demanded and P represents price.
 
-Refer to Figure 5-8.Demand is unit elastic between prices of

Accepted Answer

A)  $18 and $24.
B)  $24 and $30.
C)  $24 and $36.
D)  $30 and $36.E) B) and D)
F) None of the above

Question 8

Suppose the cross-price elasticity of demand between hot dogs and mustard is -2.00.This implies that a 20 percent increase in the price of hot dogs will cause the quantity of mustard purchased to

Accepted Answer

A)  fall by 200 percent.
B)  fall by 40 percent.
C)  rise by 200 percent.
D)  rise by 40 percent.E) None of the above
F) B) and D)

Question 9

When demand is perfectly inelastic,the price elasticity of demand

Accepted Answer

A)  is zero and the demand curve is vertical.
B)  is zero and the demand curve is horizontal.
C)  approaches infinity and the demand curve is vertical.
D)  approaches infinity and the demand curve is horizontal.E) B) and D)
F) None of the above

Question 10

Last year,Joan bought 50 pounds of hamburger when her household's income was $40,000.This year,her household income was only $30,000 and Joan bought 60 pounds of hamburger.All else constant,Joan's income elasticity of demand for hamburger is

Accepted Answer

A)  positive, so Joan considers hamburger to be an inferior good.
B)  positive, so Joan considers hamburger to be a normal good and a necessity.
C)  negative, so Joan considers hamburger to be an inferior good.
D)  negative, so Joan considers hamburger to be a normal good, but not a necessity.E) B) and D)
F) None of the above

Question 11

Supply is said to be inelastic if the quantity supplied responds substantially to changes in the price,and elastic if the quantity supplied responds only slightly to price.

Accepted Answer

A) True 
 B)False

Question 12

How did the farm population in the United States change between 1950 and 2000?

Accepted Answer

A)  It dropped from 10 million to fewer than 3 million people.
B)  It dropped from 20 million to fewer than 5 million people.
C)  It dropped from 30 million to just over 6 million people.
D)  It increased from 10 million to almost 12 million people.E) B) and D)
F) A) and B)

Question 13

When we move upward and to the left along a linear demand curve,price elasticity of demand

Accepted Answer

A)  first becomes smaller, then larger.
B)  always becomes larger.
C)  always becomes smaller.
D)  first becomes larger, then smaller.E) None of the above
F) B) and C)

Question 14

If a 30 percent change in price causes a 15 percent change in quantity supplied,then the price elasticity of supply is

Accepted Answer

A)  0.5 and supply is elastic.
B)  0.5 and supply is inelastic.
C)  2 and supply is inelastic.
D)  2 and supply is elastic.E) A) and B)
F) A) and C)

Question 15

Figure 5-12
 
-Refer to Figure 5-12.Along which of these segments of the supply curve is supply least elastic?

Accepted Answer

A)  between E and F
B)  between C and D
C)  between A and C
D)  between A and BE) None of the above
F) A) and B)

Question 16

If the price elasticity of supply is zero,then

Accepted Answer

A)  supply is more elastic than it is in any other case.
B)  the supply curve is horizontal.
C)  the quantity supplied is the same, regardless of price.
D)  a change in demand will cause a relatively small change in the equilibrium price.E) A) and C)
F) B) and C)

Question 17

Figure 5-1
 
-Refer to Figure 5-1.Assume the section of the demand curve labeled A corresponds to prices between $8 and $16.Then,when the price changes between $9 and $10,

Accepted Answer

A)  quantity demanded changes proportionately less than the price.
B)  quantity demanded changes proportionately more than the price.
C)  quantity demanded changes the same amount proportionately as price.
D)  the price elasticity of demand is less than 1.E) A) and B)
F) B) and C)

Question 18

In January the price of widgets was $2.00 and Wendy's Widgets produced 80 widgets.In February the price of widgets was $2.50 and Wendy's Widgets produced 110 widgets.In March the price of widgets was $3.00 and Wendy's Widgets produced 140 widgets.The price elasticity of supply of Wendy's Widgets was

Accepted Answer

A)  0.70 when the price increased from $2.00 to $2.50 and 0.76 when the price increased from $2.50 to $3.00.
B)  0.88 when the price increased from $2.00 to $2.50 and 1.08 when the price increased from $2.50 to $3.00.
C)  1.42 when the price increased from $2.00 to $2.50 and 1.32 when the price increased from $2.50 to $3.00.
D)  1.50 when the price increased from $2.00 to $2.50 and 1.18 when the price increased from $2.50 to $3.00.E) B) and C)
F) A) and C)

Question 19

Using the midpoint method,the price elasticity of demand for a good is computed to be approximately 1.5.Which of the following events is consistent with a 3.5 percent increase in the price of the good?

Accepted Answer

A)  The quantity of the good demanded decreases from 25,294 to 24,000.
B)  The quantity of the good demanded decreases from 50,000 to 48,847.
C)  The quantity of the good demanded decreases by 2.33 percent.
D)  The quantity of the good demanded decreases by 4.29 percent.E) B) and C)
F) A) and D)

Question 20

When the Shaffers had a monthly income of $4,000,they usually ate out 8 times a month.Now that the couple makes $4,500 a month,they eat out 10 times a month.Compute the couple's income elasticity of demand using the midpoint method.Explain your answer.(Is a restaurant meal a normal or inferior good to the couple?)

Accepted Answer

The income elasticity of deman...

Exam 5: Elasticity and Its Applications

Figure 5-2 -Refer to Figure 5-2.Sellers' total revenue would increase if the price

Correct Answer
verified

Table 5-1 -Refer to Table 5-1.Using the midpoint method,the income elasticity of demand for good Y is

Correct Answer
verified

In January the price of widgets was $2.00 and Wendy's Widgets produced 80 widgets.In February the price of widgets was $2.50 and Wendy's Widgets produced 110 widgets.In March the price of widgets was $3.00 and Wendy's Widgets produced 140 widgets.The price elasticity of supply of Wendy's Widgets was

Correct Answer
verified

When we move upward and to the left along a linear demand curve,price elasticity of demand

Correct Answer
verified

Suppose the cross-price elasticity of demand between hot dogs and mustard is -2.00.This implies that a 20 percent increase in the price of hot dogs will cause the quantity of mustard purchased to

Correct Answer
verified

If a change in the price of a good results in no change in total revenue,then

Correct Answer
verified

If the price elasticity of supply is zero,then

Correct Answer
verified

Last year,Joan bought 50 pounds of hamburger when her household's income was $40,000.This year,her household income was only $30,000 and Joan bought 60 pounds of hamburger.All else constant,Joan's income elasticity of demand for hamburger is

Correct Answer
verified

When quantity moves proportionately the same amount as price,demand is

Correct Answer
verified

Elasticity of demand is closely related to the slope of the demand curve.The more responsive buyers are to a change in price,the

Correct Answer
verified

Using the midpoint method,the price elasticity of demand for a good is computed to be approximately 1.5.Which of the following events is consistent with a 3.5 percent increase in the price of the good?

Correct Answer
verified

Supply is said to be inelastic if the quantity supplied responds substantially to changes in the price,and elastic if the quantity supplied responds only slightly to price.

Correct Answer
verified

If a 30 percent change in price causes a 15 percent change in quantity supplied,then the price elasticity of supply is

Correct Answer
verified

When demand is perfectly inelastic,the price elasticity of demand

Correct Answer
verified

Figure 5-10 -Refer to Figure 5-10.If,holding the supply curve fixed,there were an increase in demand that caused the equilibrium price to increase from $6 to $8,then sellers' total revenue would

Correct Answer
verified

Figure 5-1 -Refer to Figure 5-1.Assume the section of the demand curve labeled A corresponds to prices between $8 and $16.Then,when the price changes between $9 and $10,

Correct Answer
verified

Figure 5-8. A demand curve is shown on the graph below. On the graph, Q represents quantity demanded and P represents price. -Refer to Figure 5-8.Demand is unit elastic between prices of

Correct Answer
verified

Figure 5-12 -Refer to Figure 5-12.Along which of these segments of the supply curve is supply least elastic?

Correct Answer
verified

Correct Answer
verified
The income elasticity of deman...
View Answer

How did the farm population in the United States change between 1950 and 2000?

Correct Answer
verified

Exam 5: Elasticity and Its Applications

Figure 5-2 -Refer to Figure 5-2.Sellers' total revenue would increase if the price

Correct AnswerverifiedShow Answer

Table 5-1 -Refer to Table 5-1.Using the midpoint method,the income elasticity of demand for good Y is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When we move upward and to the left along a linear demand curve,price elasticity of demand

Correct AnswerverifiedShow Answer

Suppose the cross-price elasticity of demand between hot dogs and mustard is -2.00.This implies that a 20 percent increase in the price of hot dogs will cause the quantity of mustard purchased to

Correct AnswerverifiedShow Answer

If a change in the price of a good results in no change in total revenue,then

Correct AnswerverifiedShow Answer

If the price elasticity of supply is zero,then

Correct AnswerverifiedShow Answer

Last year,Joan bought 50 pounds of hamburger when her household's income was $40,000.This year,her household income was only $30,000 and Joan bought 60 pounds of hamburger.All else constant,Joan's income elasticity of demand for hamburger is

Correct AnswerverifiedShow Answer

When quantity moves proportionately the same amount as price,demand is

Correct AnswerverifiedShow Answer

Elasticity of demand is closely related to the slope of the demand curve.The more responsive buyers are to a change in price,the

Correct AnswerverifiedShow Answer

Using the midpoint method,the price elasticity of demand for a good is computed to be approximately 1.5.Which of the following events is consistent with a 3.5 percent increase in the price of the good?

Correct AnswerverifiedShow Answer

Supply is said to be inelastic if the quantity supplied responds substantially to changes in the price,and elastic if the quantity supplied responds only slightly to price.

Correct AnswerverifiedShow Answer

If a 30 percent change in price causes a 15 percent change in quantity supplied,then the price elasticity of supply is

Correct AnswerverifiedShow Answer

When demand is perfectly inelastic,the price elasticity of demand

Correct AnswerverifiedShow Answer

Figure 5-10 -Refer to Figure 5-10.If,holding the supply curve fixed,there were an increase in demand that caused the equilibrium price to increase from $6 to $8,then sellers' total revenue would

Correct AnswerverifiedShow Answer

Figure 5-1 -Refer to Figure 5-1.Assume the section of the demand curve labeled A corresponds to prices between $8 and $16.Then,when the price changes between $9 and $10,

Correct AnswerverifiedShow Answer

Figure 5-8. A demand curve is shown on the graph below. On the graph, Q represents quantity demanded and P represents price. -Refer to Figure 5-8.Demand is unit elastic between prices of

Correct AnswerverifiedShow Answer

Figure 5-12 -Refer to Figure 5-12.Along which of these segments of the supply curve is supply least elastic?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe income elasticity of deman...View AnswerShow Answer

How did the farm population in the United States change between 1950 and 2000?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The income elasticity of deman...
View Answer

Correct Answer
verified