Question 1

In the market for oil in the short run, demand

Accepted Answer

A)   and supply are both elastic.
B)   and supply are both inelastic.
C)   is elastic and supply is inelastic.
D)   is inelastic and supply is elastic.E) B) and D)
F) A) and D)

Question 2

The discovery of a new hybrid wheat would increase the supply of wheat. As a result, wheat farmers would realize an increase in total revenue if the

Accepted Answer

A)   supply of wheat is elastic.
B)   supply of wheat is inelastic.
C)   demand for wheat is inelastic.
D)   demand for wheat is elastic.E) B) and D)
F) All of the above

Question 3

Which of the following is likely to have the most price inelastic demand?

Accepted Answer

A)   white chocolate chip with macadamia nut cookies
B)   hardback novels
C)   salt
D)   box seats at a major league baseball gameE) None of the above
F) A) and C)

Question 4

Which of the following could be the price elasticity of demand for a good for which a decrease in price would increase revenue?

Accepted Answer

A)   0
B)   0.4
C)   1
D)   4E) All of the above
F) B) and D)

Question 5

Whether a good is a luxury or necessity depends on the

Accepted Answer

A)   price of the good.
B)   preferences of the buyer.
C)   intrinsic properties of the good.
D)   scarcity of the good.E) A) and B)
F) A) and C)

Question 6

The supply of a good will be more elastic, the

Accepted Answer

A)   more the good is considered a luxury.
B)   broader is the definition of the market for the good.
C)   larger the number of close substitutes for the good.
D)   longer the time period being considered.E) A) and D)
F) A) and C)

Question 7

When quantity demanded responds strongly to changes in price, demand is said to be

Accepted Answer

A)   fluid.
B)   elastic.
C)   dynamic.
D)   highly variable.E) A) and B)
F) None of the above

Question 8

A bakery would be willing to supply 500 bagels per day at a price of $0.50 each. At a price of $0.80, the bakery would be willing to supply 1,100 bagels. Using the midpoint method, the price elasticity of supply for bagels is about

Accepted Answer

A)   0.62.
B)   0.77.
C)   1.24.
D)   1.63.E) B) and C)
F) B) and D)

Question 9

A "Just Say No" drug education policy that successfully educates consumers to reduce their demand for drugs will lower drug prices and reduce the quantity of drugs demanded.

Accepted Answer

A) True 
 B)False

Question 10

If the income elasticity of demand for a good is 0.56, is the good a normal or inferior good?

Accepted Answer

The good i...

Question 11

The cross-price elasticity of demand for bacon and eggs likely would be negative because bacon and eggs are complements for many people.

Accepted Answer

A) True 
 B)False

Question 12

Table 5-7
The following table shows a portion of the demand schedule for a particular good at various levels of income.
 
-Refer to Table 5-7. Using the midpoint method, at a price of $16, what is the income elasticity of demand when income rises from $5,000 to $10,000?

Accepted Answer

A)   0.00
B)   0.50
C)   1.00
D)   1.50E) A) and B)
F) C) and D)

Question 13

Suppose the price elasticity of demand for a product is 1.3. If a supplier wants to increase revenue, what change should it make to price, if any?

Accepted Answer

The answer of Suppose the price elasticity of demand for...

Question 14

Under which of the following conditions would the interdiction of illegal drugs result in a decrease in the quantity of drugs sold and in a decrease in total spending on illegal drugs by drug users?

Accepted Answer

A)   The interdiction has the effect of shifting the demand curve for illegal drugs to the right.
B)   The price elasticity of demand for illegal drugs is 1.3.
C)   The price elasticity of supply for illegal drugs is 0.8.
D)   As a result of the interdiction, the price of illegal drugs increases by 20 percent and the quantity of illegal drugs sold decreases by 16 percent.E) A) and D)
F) C) and D)

Question 15

Which of the following is not a determinant of the price elasticity of demand for a good?

Accepted Answer

A)   the time horizon
B)   the steepness or flatness of the supply curve for the good
C)   the definition of the market for the good
D)   the availability of substitutes for the goodE) A) and D)
F) None of the above

Question 16

If demand is price inelastic, then when price rises, total revenue

Accepted Answer

A)   will fall.
B)   will rise.
C)   will remain unchanged.
D)   may rise, fall, or remain unchanged. More information is need to determine the change in total revenue with certainty.E) A) and B)
F) A) and C)

Question 17

Figure 5-13 
-Refer to Figure 5-13. Between point A and point B on the graph, demand is

Accepted Answer

A)   perfectly elastic.
B)   inelastic.
C)   unit elastic.
D)   elastic, but not perfectly elastic.E) A) and D)
F) B) and D)

Question 18

Table 5-2
 
-Refer to Table 5-2. Using the midpoint method, if the price falls from $200 to $150, the price elasticity of demand is

Accepted Answer

A)   zero.
B)   unit elastic.
C)   inelastic.
D)   elastic.E) None of the above
F) All of the above

Question 19

With regard to elasticity, as a firm nears its production capacity, supply becomes more

Accepted Answer

The answer of With regard to elasticity, as a firm...

Question 20

A city wants to raise revenues to build a new municipal swimming pool next year. The mayor suggests that the city raise the price of admission to the current municipal pools this year to raise revenues. The city manager suggests that the city lower the price of admission to raise revenues. Who is correct?

Accepted Answer

A)   Both the mayor and city manager would be correct if demand were price elastic.
B)   Both the mayor and city manager would be correct if demand were price inelastic.
C)   The mayor would be correct if demand were price elastic; the city manager would be correct if demand were price inelastic.
D)   The mayor would be correct if demand were price inelastic; the city manager would be correct if demand were price elastic.E) All of the above
F) A) and B)

Exam 5: Elasticity and Its Application

When quantity demanded responds strongly to changes in price, demand is said to be

Correct Answer
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Table 5-7 The following table shows a portion of the demand schedule for a particular good at various levels of income. -Refer to Table 5-7. Using the midpoint method, at a price of $16, what is the income elasticity of demand when income rises from $5,000 to $10,000?

Correct Answer
verified

If the income elasticity of demand for a good is 0.56, is the good a normal or inferior good?

Correct Answer
verified
The good i...
View Answer

Under which of the following conditions would the interdiction of illegal drugs result in a decrease in the quantity of drugs sold and in a decrease in total spending on illegal drugs by drug users?

Correct Answer
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Suppose the price elasticity of demand for a product is 1.3. If a supplier wants to increase revenue, what change should it make to price, if any?

Correct Answer
verified

The discovery of a new hybrid wheat would increase the supply of wheat. As a result, wheat farmers would realize an increase in total revenue if the

Correct Answer
verified

Which of the following could be the price elasticity of demand for a good for which a decrease in price would increase revenue?

Correct Answer
verified

The supply of a good will be more elastic, the

Correct Answer
verified

Table 5-2 -Refer to Table 5-2. Using the midpoint method, if the price falls from $200 to $150, the price elasticity of demand is

Correct Answer
verified

A "Just Say No" drug education policy that successfully educates consumers to reduce their demand for drugs will lower drug prices and reduce the quantity of drugs demanded.

Correct Answer
verified

Which of the following is not a determinant of the price elasticity of demand for a good?

Correct Answer
verified

Whether a good is a luxury or necessity depends on the

Correct Answer
verified

A bakery would be willing to supply 500 bagels per day at a price of $0.50 each. At a price of $0.80, the bakery would be willing to supply 1,100 bagels. Using the midpoint method, the price elasticity of supply for bagels is about

Correct Answer
verified

Correct Answer
verified

In the market for oil in the short run, demand

Correct Answer
verified

If demand is price inelastic, then when price rises, total revenue

Correct Answer
verified

The cross-price elasticity of demand for bacon and eggs likely would be negative because bacon and eggs are complements for many people.

Correct Answer
verified

Figure 5-13 -Refer to Figure 5-13. Between point A and point B on the graph, demand is

Correct Answer
verified

With regard to elasticity, as a firm nears its production capacity, supply becomes more

Correct Answer
verified

Which of the following is likely to have the most price inelastic demand?

Correct Answer
verified

Exam 5: Elasticity and Its Application

When quantity demanded responds strongly to changes in price, demand is said to be

Correct AnswerverifiedShow Answer

Table 5-7 The following table shows a portion of the demand schedule for a particular good at various levels of income. -Refer to Table 5-7. Using the midpoint method, at a price of $16, what is the income elasticity of demand when income rises from $5,000 to $10,000?

Correct AnswerverifiedShow Answer

If the income elasticity of demand for a good is 0.56, is the good a normal or inferior good?

Correct AnswerverifiedThe good i...View AnswerShow Answer

Under which of the following conditions would the interdiction of illegal drugs result in a decrease in the quantity of drugs sold and in a decrease in total spending on illegal drugs by drug users?

Correct AnswerverifiedShow Answer

Suppose the price elasticity of demand for a product is 1.3. If a supplier wants to increase revenue, what change should it make to price, if any?

Correct AnswerverifiedShow Answer

The discovery of a new hybrid wheat would increase the supply of wheat. As a result, wheat farmers would realize an increase in total revenue if the

Correct AnswerverifiedShow Answer

Which of the following could be the price elasticity of demand for a good for which a decrease in price would increase revenue?

Correct AnswerverifiedShow Answer

The supply of a good will be more elastic, the

Correct AnswerverifiedShow Answer

Table 5-2 -Refer to Table 5-2. Using the midpoint method, if the price falls from $200 to $150, the price elasticity of demand is

Correct AnswerverifiedShow Answer

A "Just Say No" drug education policy that successfully educates consumers to reduce their demand for drugs will lower drug prices and reduce the quantity of drugs demanded.

Correct AnswerverifiedShow Answer

Which of the following is not a determinant of the price elasticity of demand for a good?

Correct AnswerverifiedShow Answer

Whether a good is a luxury or necessity depends on the

Correct AnswerverifiedShow Answer

A bakery would be willing to supply 500 bagels per day at a price of $0.50 each. At a price of $0.80, the bakery would be willing to supply 1,100 bagels. Using the midpoint method, the price elasticity of supply for bagels is about

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the market for oil in the short run, demand

Correct AnswerverifiedShow Answer

If demand is price inelastic, then when price rises, total revenue

Correct AnswerverifiedShow Answer

The cross-price elasticity of demand for bacon and eggs likely would be negative because bacon and eggs are complements for many people.

Correct AnswerverifiedShow Answer

Figure 5-13 -Refer to Figure 5-13. Between point A and point B on the graph, demand is

Correct AnswerverifiedShow Answer

With regard to elasticity, as a firm nears its production capacity, supply becomes more

Correct AnswerverifiedShow Answer

Which of the following is likely to have the most price inelastic demand?

Correct AnswerverifiedShow Answer

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The good i...
View Answer

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