Question 1

Dolls are __________________ than Barbie dolls because ___________________.

Accepted Answer

A)  less price elastic;the scope of the market is more broadly defined
B)  more price elastic;the scope of the market is more broadly defined
C)  less price elastic;they have more available substitutes
D)  more price elastic;they have more available substitutes

Question 2

Markers are _______________________ than Sharpies because ____________________.

Accepted Answer

A)  less price elastic;it is a smaller portion of one's income
B)  more price elastic;it is a smaller portion of one's income
C)  less price elastic;the scope of the market is more broadly defined
D)  more price elastic;the scope of the market is more broadly defined

Question 3

Different measurements of elasticity include:

Accepted Answer

A)  income elasticity of demand,income elasticity of supply.
B)  price elasticity of demand,price elasticity of supply.
C)  cross-price elasticity of demand,income elasticity of supply.
D)  preference elasticity of demand,cross-price elasticity of supply.

Question 4

A rare coin dealer is likely to have a _______________ price elasticity of supply than a coffee shop due to ____________________.

Accepted Answer

A)  more elastic;the availability of inputs
B)  less elastic;the availability of inputs
C)  more elastic;a longer adjustment time
D)  more elastic;a shorter adjustment time

Question 5

Demand tends to be more elastic:

Accepted Answer

A)  when price is high and more inelastic when price is low.
B)  when price is low and more inelastic when price is high.
C)  when the demand is perfectly inelastic.
D)  the higher the quantity demanded.

Question 6

A tavern is likely to have a ______________________ price elasticity of supply than an antiques dealer due to ______________________.

Accepted Answer

A)  more elastic;availability of inputs
B)  less elastic;availability of inputs
C)  less elastic;a longer adjustment time
D)  less elastic;a shorter adjustment time

Question 7

If total revenue increases as a result of a price increase:

Accepted Answer

A)  the good is price elastic.
B)  the good is price inelastic.
C)  the good is price unit elastic.
D)  Any of these could be true.

Question 8

Elasticity along a demand curve:

Accepted Answer

A)  is constant if the demand curve is linear.
B)  changes only when the demand curve is bowed out.
C)  changes along any demand curve.
D)  changes only when the demand curve is bowed in.

Question 9

A perfectly elastic demand is one in which:

Accepted Answer

A)  the demand curve is perfectly vertical.
B)  the demand curve is perfectly horizontal.
C)  measured elasticity is exactly 1.
D)  the response to a change in price is immediate.

Question 10

How much the demand for one good changes in response to a change in the price of a different good is measured by:

Accepted Answer

A)  price elasticity of supply.
B)  price elasticity of demand.
C)  income elasticity.
D)  cross-price elasticity.

Question 11

When a small percentage change in price causes a large percentage change in the quantity demanded,we say that they have a:

Accepted Answer

A)  highly elastic demand.
B)  highly inelastic demand.
C)  low magnitude of response.
D)  high magnitude of response.

Question 12

The resulting change in the quantity of gas demanded of increasing prices over the last decade:

Accepted Answer

A)  has been more elastic than it has been in the last six months.
B)  has been less elastic than it has been in the last six months.
C)  has been relatively the same over that time period.
D)  has become a non-issue for people now that they are used to high gas prices.

Question 13

If a good has an income elasticity of 1.83,which of the following can be said about it?

Accepted Answer

A)  It is a normal good,and a necessity.
B)  It is an inferior good,and a necessity.
C)  The good probably has a lot of close substitutes available.
D)  None of these statements is true.

Question 14

Many say that there is no substitute for a real diamond.This would imply that diamonds:

Accepted Answer

A)  are price elastic.
B)  are price inelastic.
C)  are unit elastic.
D)  are not a sustainable market.

Question 15

A pack of gum is ______________ than a steak because _______________.

Accepted Answer

A)  less price elastic;it is a smaller portion of one's income
B)  more price elastic;it is a smaller portion of one's income
C)  less price elastic;they are more of a luxury good
D)  more price elastic;they are more of a luxury good

Question 16

Income elasticity will be positive for:

Accepted Answer

A)  all normal goods.
B)  all inferior goods.
C)  only necessities.
D)  only luxury goods with substitutes.

Question 17

Ray just got a raise,and decided to splurge on a fancy dinner to celebrate.The change to Ray's demand for fancy dinners could be captured by the:

Accepted Answer

A)  price elasticity of supply.
B)  price elasticity of demand.
C)  cross-price elasticity.
D)  income elasticity of demand.

Question 18

Assuming elasticity is reported in absolute value,a unit elastic good:

Accepted Answer

A)  has a measured elasticity of greater than zero.
B)  has a measured elasticity of greater than one.
C)  has a measured elasticity of less than one.
D)  has a measured elasticity of exactly one.

Question 19

A good whose demand is unitary elastic refers to:

Accepted Answer

A)  one in which the absolute value of the percentage change in the quantity demanded exactly equals the absolute value of the corresponding percentage change in price.
B)  one in which the absolute value of the percentage change in quantity exactly equals one.
C)  one in which the absolute value of the percentage change in price exactly equals one.
D)  one in which both the absolute value of the percentage change in quantity demanded and the absolute value of the corresponding percentage change in price equals one.

Question 20

A good that has an income elasticity of 2.3 is:

Accepted Answer

A)  a luxury good.
B)  an inferior good.
C)  a necessity good.
D)  a complement good.

Exam 4: Elasticity

A pack of gum is ______________ than a steak because _______________.

Correct AnswerverifiedShow Answer

If a good has an income elasticity of 1.83,which of the following can be said about it?

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Different measurements of elasticity include:

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When a small percentage change in price causes a large percentage change in the quantity demanded,we say that they have a:

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Dolls are __________________ than Barbie dolls because ___________________.

Correct AnswerverifiedShow Answer

A tavern is likely to have a ______________________ price elasticity of supply than an antiques dealer due to ______________________.

Correct AnswerverifiedShow Answer

Assuming elasticity is reported in absolute value,a unit elastic good:

Correct AnswerverifiedShow Answer

Elasticity along a demand curve:

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A perfectly elastic demand is one in which:

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A good that has an income elasticity of 2.3 is:

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If total revenue increases as a result of a price increase:

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The resulting change in the quantity of gas demanded of increasing prices over the last decade:

Correct AnswerverifiedShow Answer

A good whose demand is unitary elastic refers to:

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Income elasticity will be positive for:

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How much the demand for one good changes in response to a change in the price of a different good is measured by:

Correct AnswerverifiedShow Answer

Many say that there is no substitute for a real diamond.This would imply that diamonds:

Correct AnswerverifiedShow Answer

A rare coin dealer is likely to have a _______________ price elasticity of supply than a coffee shop due to ____________________.

Correct AnswerverifiedShow Answer

Ray just got a raise,and decided to splurge on a fancy dinner to celebrate.The change to Ray's demand for fancy dinners could be captured by the:

Correct AnswerverifiedShow Answer

Demand tends to be more elastic:

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Markers are _______________________ than Sharpies because ____________________.

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A pack of gum is than a steak because _.

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Dolls are than Barbie dolls because _.

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A tavern is likely to have a price elasticity of supply than an antiques dealer due to .

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A rare coin dealer is likely to have a _ price elasticity of supply than a coffee shop due to ______.

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Markers are ___ than Sharpies because .

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