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Questions in this quiz (44)
1The price elasticity of demand measures how much
- Aquantity demanded responds to a change in price
- Bquantity demanded responds to a change in income
- Cprice responds to a change in demand
- Ddemand responds to a change in supply
2For a good that is a necessity
- Aquantity demanded tends to respond substantially to a change in price
- Bdemand tends to be inelastic
- Cthe law of demand does not apply
- DAll of the above are correct
3Goods with many close substitutes tend to have
- Amore elastic demands.
- Bless elastic demands
- Cprice elasticities of demand that are unit elastic
- Dincome elasticities of demand that are negative
4If the price of natural gas rises, when is the price elasticity of demand likely to be the highest?
- Aimmediately after the price increase
- Bone month after the price increase
- Cthree months after the price increase
- Done year after the price increase
5The price elasticity of demand for eggs
- Ais computed as the percentage change in quantity demanded of eggs divided by the
percentage change in price of eggs - Bwill be lower if there is a new invention that is a close substitute for eggs
- Cwill be higher if consumers consider eggs to be a luxury good
- DAll of the above are correct
- Ais computed as the percentage change in quantity demanded of eggs divided by the
6If the price elasticity of demand for a good is -4.0, then a 10 percent increase in price results in a
- A0.4 percent decrease in the quantity demanded
- B2.5 percent decrease in the quantity demanded
- C4 percent decrease in the quantity demanded
- D40 percent decrease in the quantity demanded
7If the price elasticity of demand for a good is -0.4, then a 10 percent increase in price results in a
- A0.4 percent decrease in the quantity demanded
- B2.5 percent decrease in the quantity demanded
- C4 percent decrease in the quantity demanded
- D40 percent decrease in the quantity demanded
8The flatter the demand curve through a given point, the
- Agreater the price elasticity of demand at that poin
- Bsmaller the price elasticity of demand at that point
- Ccloser the price elasticity of demand will be to the slope of the curve
- Dgreater the absolute value of the change in total revenue when there is a movement from
that point upward and to the left along the demand curve.
9Suppose that quantity demand rises by 10% as a result of a 15% decrease in price. The price elasticity of demand
for this good is- Ainelastic and equal to -0.67
- Belastic and equal to 0.67
- Cinelastic and equal to 1.50
- Delastic and equal to 1.50
10Demand is elastic if elasticity is
- Aless than 1
- Bequal to 1.
- Cequal to 0
- Dgreater than 1 in absolute value
11Refer to Figure 5-4. The section of the demand curve from A to B represents the
- Aelastic section of the demand curve.
- Binelastic section of the demand curve
- Cunit elastic section of the demand curve
- Dperfectly elastic section of the demand curve
12Refer to Figure 5-4. The section of the demand curve from B to C represents the
- Aelastic section of the demand curve
- Binelastic section of the demand curve
- Cunit elastic section of the demand curve
- Dperfectly elastic section of the demand curve
13The case of perfectly elastic demand is illustrated by a demand curve that is
- Avertical.
- Bhorizontal
- Cdownward-sloping but relatively steep
- Ddownward-sloping but relatively flat
14When demand is perfectly inelastic, the price elasticity of demand
- Ais zero, and the demand curve is vertical
- Bis zero, and the demand curve is horizontal
- Capproaches infinity, and the demand curve is vertical.
- Dapproaches infinity, and the demand curve is horizontal
15Which of the following could be the price elasticity of demand for a good for which an increase in price would
decrease revenue?- A0
- B-0.5
- C-1
- D-1.5
16If demand is price inelastic, then when price rises
- Atotal revenue will fall
- Btotal revenue will rise
- Ctotal revenue will remain unchanged
- Dtotal revenue may rise, fall, or remain unchanged. More information is need to determine
the change in total revenue with certainty.
17Refer to Figure 5-7. For prices above $8, demand is price
- Aelastic, and total revenue will rise as price rises
- Binelastic, and total revenue will rise as price rises
- Celastic, and total revenue will fall as price rises
- Dinelastic, and total revenue will fall as price rises
18Refer to Figure 5-11. When the price is $30, total revenue is
- A$3000
- B$5000
- C$7000
- D$9000
19. Refer to Figure 5-11. When price falls from $50 to $40, it can be inferred that demand between those two prices is
- Ainelastic, since total revenue decreases from $8,000 to $5,000
- Binelastic, since total revenue increases from $5,000 to $8,000
- Celastic, since total revenue increases from $5,000 to $8,000
- Dunit elastic, since total revenue does not change
20The price elasticity of supply measures how much
- Athe quantity supplied responds to changes in input prices
- Bthe quantity supplied responds to changes in the price of the good
- Cthe price of the good responds to changes in supply
- Dsellers respond to changes in technology
21Refer to Figure 6-10. The price paid by buyers after the tax is imposed is
- A8
- B10
- C14
- D18
22Refer to Figure 6-10. The amount of the tax per unit is
- A4
- B5
- C6
- D10
23Refer to Figure 6-10. How much tax revenue does this tax produce for the government?
- A$480
- B$600
- C800
- D$1120
24Refer to Figure 6-11. The equilibrium price in the market before the tax is imposed is
- A$3.50
- B$5
- C$6
- D$7
25Refer to Figure 6-11. The price paid by buyers after the tax is imposed is
- A2.50
- B3.50
- C5.00
- D6.00
26Refer to Figure 6-11. The effective price sellers receive after the tax is imposed is
- A$2.50
- B$3.50
- C5.00
- D6.00
27Refer to Figure 6-11. The amount of the tax per unit is
- A1
- B1.50
- C2.50
- D3.50
28Refer to Figure 6-11. Buyers pay how much of the tax per unit?
- A1
- B1.50
- C2.50
- D3.50
29Refer to Figure 6-11. Sellers pay how much of the tax per unit?
- A1.00
- B1.50
- C2.50
- D3.50
30Refer to Figure 6-11. Suppose the same supply and demand curves apply and a tax of the same amount per unit
as shown here is imposed. Now, however, the buyers of the good, rather than the sellers, are required to pay the
tax to the government. Now, relative to the case depicted in the figure- Athe burden on buyers will be larger and the burden on sellers will be smaller
- Bhe burden on buyers will be smaller and the burden on sellers will be larger.
- Cthe burden on buyers will be the same and the burden on sellers will be the same
- DThe relative burdens in the two cases cannot be determined without further information
31Refer to Figure 6-11. How much tax revenue does this tax generate for the government?
- A$75
- B$125
- C$175
- D$300
32In which of these cases will the tax burden fall most heavily on sellers of the good?
- AThe demand curve is relatively steep and the supply curve is relatively flat
- BThe demand curve is relatively flat and the supply curve is relatively steep
- CThe demand curve and the supply curve are both relatively flat
- DThe demand curve and the supply curve are both relatively steep
33Consumer surplus
- Ais the amount of a good that a consumer can buy at a price below equilibrium price
- Bis the amount a consumer is willing to pay minus the amount the consumer actually pays
- Cis the number of consumers who are excluded from a market because of scarcity
- Dmeasures how much a seller values a good
34Refer to Figure 7-1. When the price is P1, consumer surplus is
- Aa
- Ba+b
- Ca+b+c
- Da+b+d
35Refer to Figure 7-1. When the price is P2, consumer surplus is
- Aa
- Bb
- Ca+b
- Da+b++c
36Refer to Figure 7-4. At the equilibrium price, consumer surplus is
- A200
- B300
- C500
- D600
37Refer to Figure 7-5. What is the consumer surplus if the price is $100?
- A2500
- B5000
- C10000
- D20000
38Refer to Figure 7-9. If the equilibrium price is $200, what is the producer surplus?
- A625
- B3750
- C10,000
- D20,000
39Refer to Figure 7-10. At the equilibrium price, producer surplus is
- A200
- B400
- C450
- D900
40Refer to Figure 7-10. If the government imposes a price ceiling of $70 in this market, then the new producer
surplus will be- A50
- B100
- C175
- D350
41Refer to Figure 7-16. The equilibrium price is
- AP1
- BP2
- CP3
- DP5
42Refer to Figure 7-16. If the price were P3, consumer surplus would be represented by the area
- AA
- BA+B+C
- CD+H+F
- DA+B+C+D+H+F
43Refer to Figure 7-16. At equilibrium, producer surplus is represented by the area
- AF
- BF+G
- CD+H+F
- DD+H+F+G+I
44Refer to Figure 7-16. If the price were P1, producer surplus would be represented by the area
- AF
- BF+G
- CD+H+F
- DD+H+F+G+I
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- Quiz on Untitled, created by April Woolley on 19/03/2015.
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- April Woolley
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