1. If both the supply of and the demand for a good are highly elastic, a shift of either curve will always result in

A. a decrease in price

B. an increase in price

C. a large change in quantity

D. no change

2. If the supply of rental housing increases causing the price to fall and apartment dwellers move into bigger apartments that cost the same as their old ones, we can infer that the

A. demand for apartments is elastic

B. demand for apartments is unit elastic

C. demand for apartments is inelastic

3. The elasticity of demand for oil is -0.5 and the elasticity of supply if 0.20. IF the demand for oil increase 10 percent what happens to the price of oil?

A. It increase by 14 percent

B. It decreases by 20 percent

C. It increases by 8 percent

4. If the price elasticity of demand for a product is 1 in absolute value, and the price elasticity of supply of the same product is 1, what is the predicted percent change in price from a 1 percent increase in demand?

A. a rise in price of 0.5 percent

B. a rise in price of 2 percent

C. a fall in price of 0.5 percent

D. a fall in price of 2 percent

5. Farmers can produce more milk at a lower cost, but Americans want to drink only so much milk. This suggests that the demand curve for milk is:

A. elastic

B. inelastic

C. unaffected by elasticity

6. When the supply curve in the Sudanese salve trade is perfectly _____, every slave bought by the redeemers results in/is ____ held in captivitiy.

A. inelastic; more slaves

B. inelastic; one less slave

C. inelastic; redeemed at a lower price than expected

D. elastic; redeemed at a higher price than expected

7. If the price elasticity of supply is 0.75, then when the price of Good Y falls by 10 percent, the quantity supplied of Good Y:

A. rises by 7.5 percent

B. rises by 133 percent

C. falls by 7.5 percent

D. falls by 133 percent