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Chapter 5 Practice: Elasticity and its application
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Questions in this quiz (21)
1A life-saving medicine without any close substitutes will tend to have
- Aa small elasticity of demand.
- Ba large elasticity of demand.
- Ca small elasticity of supply.
- Da large elasticity of supply.
2The price of a good rises from $8 to $12, and the quantity demanded falls from 110 to 90 units. Calculated with the midpoint method, the elasticity is
- A1/5.
- B1/2.
- C2.
- D5.
3A linear, downward-sloping demand curve is
- Ainelastic.
- Bunit elastic.
- Celastic.
- Dinelastic at some points, and elastic at others.
4The ability of firms to enter and exit a market over time means that, in the long run,
- Athe demand curve is more elastic.
- Bthe demand curve is less elastic.
- Cthe supply curve is more elastic.
- Dthe supply curve is less elastic.
5An increase in the supply of a good will decrease the total revenue producers receive if
- Athe demand curve is inelastic.
- Bthe demand curve is elastic.
- Cthe supply curve is inelastic.
- Dthe supply curve is elastic.
6The price of coffee rose sharply last month, while the quantity sold remained the same. Each of five people suggests an explanation:
Tom: Demand increased, but supply was perfectly inelastic.
Dick: Demand increased, but it was perfectly inelastic.
Harry: Demand increased, but supply decreased at the same time.
Larry: Supply decreased, but demand was unit elastic.
Mary: Supply decreased, but demand was perfectly inelastic.- ATom, Dick, and Harry
- BTom, Dick, and Mary
- CTom, Harry, and Mary
- DDick, Harry, and Larry
- EDick, Harry, and Mary
7A decrease in supply will cause the smallest increase in price when
- Aboth supply and demand are elastic.
- Bdemand is inelastic and supply is elastic.
- Cdemand is elastic and supply is inelastic
- Dboth supply and demand are inelastic.
8If price increases from $10 to $20, total revenue will
- Adecrease by $120, so demand must be elastic in this price range.
- Bincrease by $120, so demand must be inelastic in this price range.
- Cincrease by $320, so demand must be inelastic in this price range.
- Ddecrease by $320, so demand must be elastic in this price range.
9Using the midpoint method, the price elasticity of demand between point X and point Y is
- A.4
- B2.5
- C2
- D1
10A key determinant of the price elasticity of supply is the
- Atime horizon
- Bincome of consumers.
- Cprice elasticity of demand.
- Dimportance of the good in a consumer's budget.
11Income elasticity of demand measures how
- Aconsumer purchasing power is affected by a change in the price of a good.
- Bmany units of a good a consumer can buy given a certain income level.
- Cthe quantity demanded changes as consumer income changes.
- Dthe price of a good is affected when there is a change in consumer income.
12Total revenue when the price is P1 is represented by the area(s)
- AB + D
- BC + D.
- CD.
- DA + B.
13For prices above $5, demand is price
- Aelastic, and raising price will increase total revenue.
- Binelastic, and lowering price will increase total revenue.
- Cinelastic, and raising price will increase total revenue.
- D elastic, and lowering price will increase total revenue.
14At a price of $10 per unit, sellers' total revenue equals
- A$450.
- B$500.
- C$100.
- D$1250.
15Using the midpoint method, demand is unit elastic when quantity demanded changes from
- A200 to 100
- B500 to 400
- C 400 to 300.
- D300 to 200.
16If the price elasticity of demand for apples is 0.8, then a 2.4% increase in the price of apples will decrease the quantity demanded of apples by
- A1.92%, and apples sellers' total revenue will decrease as a result.
- B3%, and apples sellers' total revenue will increase as a result.
- C1.92%, and apples sellers' total revenue will increase as a result
- D3%, and apples sellers' total revenue will decrease as a result.
17Which of the following could be the price elasticity of demand for a good for which a decrease in price would decrease revenue?
- A1.8
- B2.4
- C1
- D0.8
18Moving downward and to the right along a linear demand curve, we know that total revenue
- Aalways decreases.
- Bfirst decreases, then increases.
- Calways increases.
- D first increases, then decreases.
19As we move downward and to the right along a linear, downward-sloping demand curve,
- Aboth slope and elasticity change
- Bslope remains constant but elasticity changes.
- Cslope changes but elasticity remains constant.
- Dboth slope and elasticity remain constant.
20As we move downward and to the right along a linear, downward-sloping demand curve,
- Aboth slope and elasticity change.
- Bslope remains constant but elasticity changes
- Cslope changes but elasticity remains constant
- D both slope and elasticity remain constant
21Using the midpoint method, what is the price elasticity of supply between points A and B?
- A2.33
- B 0.1
- C1.0
- D 0.43
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- Quiz on Chapter 5 Practice: Elasticity and its application, created by mfloyd6 on 12/04/2015.
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- mfloyd6
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