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1Price elasticity of demand
- AIs equal to the slope of the demand curve
- BIs the ratio of the change in quantity demanded to the change in price
- CMeasures the responsiveness of the quantity demanded of a product to a change in its price
- DAnswers A., B., and C. are all correct
2Percentages are used in prices and quantities to calculate price elasticity because
- AThe value of the result should not depend on the units of measurement used for prices and quantities
- BThe value of elasticity should be the same no matter which direction the demand curve moves
- CPercentages are relatively easy to calculate
- DThe results should not be a negative number
3When the demand for a good is elastic, the absolute value of price elasticity of demand is
- AExactly zero
- BBetween zero and one
- CExactly one
- DGreater than one
4Suppose the price of a good rises. Which of the following is/are true?
- AIf demand is inelastic, total revenues will fall
- BIf demand is elastic, total revenues will rise
- CIf demand is inelastic, total revenues will rise
- DNone of the above answers A., B., or C. is correct
5When the income elasticity of demand for a good is positive, the good is a(n)
- AInferior good
- BNormal good
- CComplementary good
- DNone of the above answers A., B., or C. is correct
6If goods A and B are substitutes, the cross price elasticity of demand between them is
- ANegative
- BZero
- CPositive
- DEither negative or positive, depending on the specific good
7Suppose that there is a decrease in the supply in a market. Under what conditions will the resulting price increase be the greatest?
- ABoth demand and supply are very inelastic
- BBoth demand and supply are very elastic
- CDemand is very elastic and supply is very inelastic
- DNone of the above answers A., B., or C. is correct
8Implicit costs include
- AWages paid to a company's workers
- BThe salary a company's owner could have earned working for someone else
- CInterest paid to a bank on a loan used to purchase raw materials
- DRent paid by a retail store to the landowner who owns the strip mall
9A normal profit, or normal rate of return
- ARepresents the opportunity cost of a firm's owners' or stockholders' investment in the firm
- BShould be thought of as a cost to the firm
- CIs the minimum amount required by the firm's investors in order to allow the firm to use their funds
- DAnswers A., B., and C. are all correct
10The cost per unit of output produced
- AIs unaffected by worker productivity
- BDepends only on the price paid for the firm's inputs
- CCan be calculated by multiplying the price of an input by the inverse of the input's productivity
- DHas nothing to do with the firm's inputs
11List three factors that affect a good’s price elasticity of demand.
Choose one of these factors and explain more completely and give an example of how it affects price elasticity of demand[blank_start].[blank_end]- A.
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- Quiz on Quiz 4, created by Sophia . on 06/12/2018.
- Author
- Sophia .
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- English
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