Question 1

Table 5-12 
-Refer to Table 5-12. Between which two quantities listed is demand most elastic?

Accepted Answer

The answer of Table 5-12 
-Refer to Table 5-12. Between...

Question 2

Figure 5-19    
-Refer to Figure 5-19. Which of the following statements is correct?

Accepted Answer

A)  Supply curve A is perfectly elastic.
B)  Supply curve B is perfectly inelastic.
C)  Supply curve C is more inelastic than supply curve D.
D)  Supply curve D is unit elastic.

Question 3

A linear, upward-sloping supply curve has

Accepted Answer

A)  a constant slope and a changing price elasticity of supply.
B)  a changing slope and a constant price elasticity of supply.
C)  both a constant slope and a constant price elasticity of supply.
D)  both a changing slope and a changing price elasticity of supply.

Question 4

Normal goods have positive income elasticities of demand, while inferior goods have negative income elasticities of demand.

Accepted Answer

A) True 
 B)False

Question 5

Figure 5-11 1 and P2, and the corresponding quantities demanded, Q1 and Q2, for the purpose of calculating the price elasticity of demand. Also suppose P2 > P1. In which of the following cases could we possibly find that (i)  demand is elastic and (ii)  a decrease in price from P1 to P2 causes an decrease in total revenue? A) 0 1 2 1 2 1 > $20. D) None of the above is correct." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 5-11. Suppose this demand curve is a straight, downward-sloping line all the way from the horizontal intercept to the vertical intercept. We choose two prices, P1 and P2, and the corresponding quantities demanded, Q1 and Q2, for the purpose of calculating the price elasticity of demand. Also suppose P2 > P1. In which of the following cases could we possibly find that (i)  demand is elastic and (ii)  a decrease in price from P1 to P2 causes an decrease in total revenue?

Accepted Answer

A)  0 1 2 
B)  $10 1 2 
C)  P1 > $20.
D)  None of the above is correct.

Question 6

The cross-price elasticity of garlic salt and onion salt is -2, which indicates that garlic salt and onion salt are substitutes.

Accepted Answer

A) True 
 B)False

Question 7

Demand for a good is said to be inelastic if the quantity demanded increases slightly when the price falls by a large amount.

Accepted Answer

A) True 
 B)False

Question 8

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 good

Question 9

Figure 5-14 
-Refer to Figure 5-14. Over which range is the supply curve in this figure the least elastic?

Accepted Answer

A)  $16 to $40
B)  $40 to $100
C)  $100 to $220
D)  $220 to $430

Question 10

Total revenue will be at its largest value on a linear demand curve at the

Accepted Answer

A)  top of the curve, where prices are highest.
B)  midpoint of the curve.
C)  low end of the curve, where quantity demanded is highest.
D)  None of the above is correct.

Question 11

The measure of how willing consumers are to buy less of a good as its price rises is called

Accepted Answer

price elas...

Question 12

The price elasticity of demand is defined as the percentage change in price divided by the percentage change in quantity demanded.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following was not a reason OPEC failed to keep the price of oil high?

Accepted Answer

A)  Over the long run, producers of oil outside of OPEC responded to higher prices by increasing oil exploration and by building new extraction capacity.
B)  Consumers responded to higher prices with greater conservation.
C)  Consumers replaced old inefficient cars with newer efficient ones.
D)  The agreement OPEC members signed allowed each country to produce as much oil as each wanted.

Question 14

For which of the following goods is the price elasticity of demand most inelastic?

Accepted Answer

A)  pizza
B)  large pizza
C)  large pepperoni pizza
D)  Domino's large pepperoni pizza

Question 15

If a firm is facing elastic demand, then the firm should decrease price to increase revenue.

Accepted Answer

A) True 
 B)False

Question 16

Holding all other forces constant, if decreasing the price of a good leads to an increase in total revenue, then the demand for the good must be

Accepted Answer

A)  unit elastic.
B)  inelastic.
C)  elastic.
D)  None of the above is correct because a price decrease never leads to an increase in total revenue.

Question 17

A good will have a more inelastic demand, the

Accepted Answer

A)  greater the availability of close substitutes.
B)  broader the definition of the market.
C)  longer the period of time.
D)  more it is regarded as a luxury.

Question 18

Suppose that 50 ice cream cones are demanded at a particular price. If the price of ice cream cones rises from that price by 4 percent, the number of ice cream cones demanded falls to 46. Using the midpoint approach to calculate the price elasticity of demand, it follows that the

Accepted Answer

A)  demand for ice cream cones in this price range is elastic.
B)  demand for ice cream cones in this price range is inelastic.
C)  demand for ice cream cones in this price range is unit elastic.
D)  price elasticity of demand for ice cream cones in this price range is 0.

Question 19

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 20

Suppose that when the price of good X increases from $800 to $850, the quantity demanded of good Y increases from 65 to 70. Using the midpoint method, the cross price elasticity of demand is about

Accepted Answer

A)  -1.2, and X and Y are complements.
B)  -0.1, and X and Y are complements.
C)  0.1, and X and Y are substitutes.
D)  1.2, and X and Y are substitutes.

Exam 5: Elasticity and Its Application

Total revenue will be at its largest value on a linear demand curve at the

Correct Answer
verified

Correct Answer
verified

The cross-price elasticity of garlic salt and onion salt is -2, which indicates that garlic salt and onion salt are substitutes.

Correct Answer
verified

If a firm is facing elastic demand, then the firm should decrease price to increase revenue.

Correct Answer
verified

Holding all other forces constant, if decreasing the price of a good leads to an increase in total revenue, then the demand for the good must be

Correct Answer
verified

Suppose that 50 ice cream cones are demanded at a particular price. If the price of ice cream cones rises from that price by 4 percent, the number of ice cream cones demanded falls to 46. Using the midpoint approach to calculate the price elasticity of demand, it follows that the

Correct Answer
verified

Normal goods have positive income elasticities of demand, while inferior goods have negative income elasticities of demand.

Correct Answer
verified

For which of the following goods is the price elasticity of demand most inelastic?

Correct Answer
verified

Demand for a good is said to be inelastic if the quantity demanded increases slightly when the price falls by a large amount.

Correct Answer
verified

Figure 5-19 -Refer to Figure 5-19. Which of the following statements is correct?

Correct Answer
verified

The measure of how willing consumers are to buy less of a good as its price rises is called

Correct Answer
verified
price elas...
View 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 Answer
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Table 5-12 -Refer to Table 5-12. Between which two quantities listed is demand most elastic?

Correct Answer
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Which of the following was not a reason OPEC failed to keep the price of oil high?

Correct Answer
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Figure 5-14 -Refer to Figure 5-14. Over which range is the supply curve in this figure the least elastic?

Correct Answer
verified

A good will have a more inelastic demand, the

Correct Answer
verified

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

Correct Answer
verified

The price elasticity of demand is defined as the percentage change in price divided by the percentage change in quantity demanded.

Correct Answer
verified

A linear, upward-sloping supply curve has

Correct Answer
verified

Suppose that when the price of good X increases from $800 to $850, the quantity demanded of good Y increases from 65 to 70. Using the midpoint method, the cross price elasticity of demand is about

Correct Answer
verified

Exam 5: Elasticity and Its Application

Total revenue will be at its largest value on a linear demand curve at the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The cross-price elasticity of garlic salt and onion salt is -2, which indicates that garlic salt and onion salt are substitutes.

Correct AnswerverifiedShow Answer

If a firm is facing elastic demand, then the firm should decrease price to increase revenue.

Correct AnswerverifiedShow Answer

Holding all other forces constant, if decreasing the price of a good leads to an increase in total revenue, then the demand for the good must be

Correct AnswerverifiedShow Answer

Suppose that 50 ice cream cones are demanded at a particular price. If the price of ice cream cones rises from that price by 4 percent, the number of ice cream cones demanded falls to 46. Using the midpoint approach to calculate the price elasticity of demand, it follows that the

Correct AnswerverifiedShow Answer

Normal goods have positive income elasticities of demand, while inferior goods have negative income elasticities of demand.

Correct AnswerverifiedShow Answer

For which of the following goods is the price elasticity of demand most inelastic?

Correct AnswerverifiedShow Answer

Demand for a good is said to be inelastic if the quantity demanded increases slightly when the price falls by a large amount.

Correct AnswerverifiedShow Answer

Figure 5-19 -Refer to Figure 5-19. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The measure of how willing consumers are to buy less of a good as its price rises is called

Correct Answerverifiedprice elas...View AnswerShow 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

Table 5-12 -Refer to Table 5-12. Between which two quantities listed is demand most elastic?

Correct AnswerverifiedShow Answer

Which of the following was not a reason OPEC failed to keep the price of oil high?

Correct AnswerverifiedShow Answer

Figure 5-14 -Refer to Figure 5-14. Over which range is the supply curve in this figure the least elastic?

Correct AnswerverifiedShow Answer

A good will have a more inelastic demand, the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The price elasticity of demand is defined as the percentage change in price divided by the percentage change in quantity demanded.

Correct AnswerverifiedShow Answer

A linear, upward-sloping supply curve has

Correct AnswerverifiedShow Answer

Suppose that when the price of good X increases from $800 to $850, the quantity demanded of good Y increases from 65 to 70. Using the midpoint method, the cross price elasticity of demand is about

Correct AnswerverifiedShow Answer

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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price elas...
View Answer

Correct Answer
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