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chapter 6 quiz a
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Questions in this quiz (32)
1Economists use the concept of ________ to measure how one economic variable, such as quantity, responds to a change in another economic variable, such as price.
- ASlope
- BRelativity
- CElasticity
- DEfficiency
2The price elasticity of demand is equal to
- Athe value of the slope of the demand curve.
- Bthe percentage change in price divided by the percentage change in quantity demanded.
- Cthe change in quantity demanded divided by the change in price.
- Dthe percentage change in quantity demanded divided by the percentage change in price.
3If the absolute value of the price elasticity of demand for aspirin equals 0.8 then
- Athe demand for aspirin is inelastic.
- Bthe demand for aspirin is elastic.
- Caspirin is a normal good
- Daspirin has few substitutes
4Refer to Figure 6-1. The section of the demand curve labeled "A" represents
- Athe elastic section of the demand curve.
- Bthe inelastic section of the demand curve
- Cthe unit-elastic section of the demand curve.
- Dthe perfectly elastic section of the demand curve
5If the demand for a steak is unit-elastic, then
- Athe percentage change in quantity demanded is 100 percent greater than the percentage change in price (in absolute value).
- Bquantity demanded does not respond to changes in price.
- Cthe percentage change in quantity demanded is equal to the percentage change in price.
- Dthe percentage change in quantity demanded is 1 percent greater than the percentage change in price.
6A perfectly elastic demand curve is
- AHorizontal
- BCurvilinear
- Cupward sloping
- Dvertical
7The larger the share of a good in a consumer's budget, holding everything else constant, the
- Amore unit-elastic is a consumer's demand
- Bmore price inelastic is a consumer's demand.
- Cmore vertical is a consumer's demand curve.
- Dmore price elastic is a consumer's demand.
8Which of the following statements is true?
- AIn general, if a product has few substitutes it will have an elastic demand.
- BThe more time that passes the more inelastic the demand for a product becomes.
- CThe demand curve for a necessity is more elastic than the demand curve for a luxury.
- DThe more narrowly we define a market, the more elastic the demand for a product will be.
9The most important determinant of the price elasticity of demand for a good is
- Athe share of the good in the consumer's budget.
- Bwhether the good is a necessity or a luxury.
- Cthe availability of substitutes for the good.
- Dthe definition of the market for a good.
10If a firm raised its price and discovered that its total revenue fell, then the demand for its product is
- Arelatively elastic.
- Bperfectly elastic.
- Cperfectly inelastic
- Drelatively inelastic
11Which of the following correctly comments on the following statement? "The only way to increase the revenue from selling a product is to increase the product's price."
- AThe statement is true
- BThis statement is not true. Revenue will increase as the price of the product increases only if demand is inelastic
- CThis statement is not true. Revenue will decrease as the price of the product increases because quantity demanded will fall.
- DIt is not true. Revenue will increase as the price of the product increases only if demand is elastic.
12The income elasticity of demand measures
- Athe responsiveness of quantity demanded to changes in income.
- Bthe percentage change in the price of a product divided by the percentage change in consumer income
- Cthe income effect of a change in price.
- Dhow a consumer's purchasing power is affected by a change in the price of a product.
13If a good has a negative income elasticity of demand, this indicates that the good is
- Anormal
- Binferior
- Ca substitute with another good
- Da complement with another good
14The cross-price elasticity of demand measures the
- Apercentage change in the price of one good divided by the percentage change in the quantity demanded of another good
- Bpercentage change in the quantity demanded of one good in one location divided by the price of the same good in another location
- Cpercentage change in the quantity demanded of one good divided by the percentage change in the price of another good
- Dabsolute change in the quantity demanded of one good divided by the absolute change in the price of another good.
15In order to prove that Motrin and Ibuprofen are substitutes, one should measure the ________ and get a ________.
- Across-price elasticity; negative number
- Bprice elasticity of demand; number greater than 1 (in absolute value)
- CC) cross-price elasticity; positive number
- Dprice elasticity of demand; number less than 1 (in absolute value)
16Suppose the supply of bicycles is price elastic. This means that
- Aconsumers will respond significantly to an increase in the quantity supplied of bicycles
- Bsuppliers will respond significantly to changes in the price of bicycles.
- Csuppliers face many substitutes for bicycles.
- Dsuppliers will increase the quantity supplied of bicycles, but not immediately.
17To calculate the price elasticity of supply we divide
- Athe percentage change in price by the percentage change in quantity supplied.
- Brise by the run.
- Cthe percentage change in quantity supplied by the percentage change in price.
- Dthe average price by the average quantity supplied
18Suppose when the price of jean-jackets increased by 10 percent, the quantity supplied increased by 16 percent. Based on this information the price elasticity of supply of jean-jackets is
- A6
- B1.6
- C16
- D0.625
19If the price elasticity of demand is -0.80, a 1% increase in price will
- Areduce the quantity demanded by 0.80%
- Breduce the quantity demanded by 80%.
- Cincrease the quantity demanded by 0.80%
- Dreduce the quantity demanded by 8.0%
20When the percentage change in quantity demanded is greater than the percentage change in price that brought it about, demand is said to be
- Aunelastic.
- Binelastic.
- Czero elastic.
- Dunit elastic
- EElastic
21If the price elasticity of demand is -0.5, then a 10 percent increase in price results in a
- A50 percent reduction in quantity demanded
- B5 percent decrease in total revenues
- C0.5 percent decrease in quantity demanded
- D5 percent decrease in quantity demanded
- E5 percent increase in quantity demanded
22If the price elasticity of demand for some good is -2.7, a 10 percent increase in the price results in
- Aa 27 percent decrease in the quantity demanded.
- BThere is not enough information to answer this question.
- Ca 2.7 percent increase in the quantity demanded.
- Da 2.7 percent decrease in the quantity demanded.
- Ea 27 percent increase in the quantity demanded.
23If the value of the price elasticity of demand is -0.6, demand is said to be
- Apartially elastic
- BInelastic
- Cpartially inelastic
- Dsomewhat inelastic
- EElastic
24If the total revenue on automobiles increases when the price of automobiles rises, the price elasticity of demand for automobiles is
- Aexactly zero
- Bdemand is inelastic.
- Cdemand is elastic
- Dequal to one
- Enot determinable from the information given
25If demand is given by Q = a - bP, the price elasticity of demand is
- A-b
- Ba-b
- CbP
- Da +b
- E-b(P/Q)
26Cross-price elasticity of demand may be defined as
- A%change in quantity demanded of good X / %change in price of good Y
- B%change in price of good X / %change in price of good Y
- C%change in price of good Y / %change in quantity demanded of good X
- D%change in quantity demanded of good X / % change in price of good X
- E%change in quantity demanded of good X / %change in income
27If two goods, X and Y, have a negative cross-elasticity of demand, then we know that they
- Aare both normal goods
- Bare both inferior goods
- Care complements
- Deach have a price elasticity greater than one.
- Eare substitutes
28If a large change in the price of a particular good causes a relatively small change in the quantity purchased
- Athe demand for that good (for the price change given) is said to be inelastic
- Bthe demand for that good (for the price change given) is said to be elastic.
- Cwe can conclude that consumers are not acting rationally, as defined by economics
- Dit will be difficult to make a profit from the good.
29If a 20 percent increase in the price of used cars results in a 10 percent decline in the number of used cars sold then the demand price elasticity coefficient equals
- A-20.0
- B-0.5
- C-10.0
- D-1.0
- E2.0
30Along a linear downward- sloping demand curve
- Aelasticity initially increases then decreases as quantity increases.
- Belasticity decreases as quantity increases.
- Celasticity increases as quantity increases.
- Delasticity is the same everywhere along the curve
- Ethere is no predictable relationship between quantity and elasticity.
31The elasticity of demand for any range of prices for any good will be more inelastic
- Athe more and the better the substitutes there are for the good.
- Bthe larger the portion of one's budget the good requires for its purchase.
- Cthe more time that is allowed for adjustment to a given price change.
- Dthe fewer and the poorer the substitutes there are for the good.
32Price elasticity of demand depends on
- Athe percentage of an individual's budget that a particular good takes up.
- Btime.
- Cthe availability of substitutes
- Dall of the above
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- Quiz on chapter 6 quiz a, created by April Woolley on 17/03/2015.
- Author
- April Woolley
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