Ask Microeconomics Expert

1) Price elasticity of demand is a measure of

A. the responsiveness of the quantity demanded of a good to a changes in the price of the good.
B. the quantity demanded of a good at a given price.
C. the demand for a product holding prices constant.
D. the horizontal shift in the demand curve when the price of a good changes.

2) If the price of oil goes up by 50 percent and the quantity demanded goes down by 25 percent, the absolute value of the price elasticity of demand is

A. 0.25.
B. 0.50.
C. 0.75.
D. 1.00.

3) The greater is the absolute price elasticity of demand, the

A. larger is the responsiveness of quantity demanded to the price change.
B. smaller is the responsiveness to a price change.
C. larger is the income of the buyer.
D. higher is the change in demand to an income change.

4) Refer to the table below. For which prices is demand elastic?

A. in a range of prices below $6.50
B. in a range of prices above $6.50
C. in a range of prices between $5 and $10
D. in a range of prices above $9.00

936_Price elasticity.jpg

5) When total revenue and price are inversely related, demand is

A. unit-elastic.
B. inelastic.
C. elastic.
D. not related.

6) Moving downward on a downward-sloping linear demand curve, the absolute value of the price elasticity of demand

A. is constant.
B. increases continuously.
C. decreases continuously.
D. may either increase or decrease.

7) Use the figure below. When price increases from $2 to $10, total revenue

1516_Inelastic demand.jpg

A. increases from areas A + B to areas B + C and demand is inelastic.                      
B. increases from areas B + C to areas A + B and demand is inelastic.
C. increases from areas B + C to areas A + D and demand is elastic.
D. increases from areas C + D to areas B + A and demand is elastic.

8) An elastic response in the quantity of a good demanded would be caused by

A. the availability of many substitutes.
B. a lack of substitutes.
C. a lack of sensitivity to the good's price.
D. the good representing a small portion of a person's budget.

9) When numerous but imperfect substitutes exist for a good, the demand for the good would tend to be

A. inelastic.
B. elastic.
C. unitary.
D. perfectly elastic.

10) When the consumer spends less than 3 percent of his income on a good, demand would be:

A. elastic.
B. unit-elastic.
C. inelastic.
D. elastic, unit-elastic, or inelastic depending upon supply.

11) Assume that number of units of good X consumed falls 6 percent when the price of good Y falls 4 percent. The cross price elasticity of demand between goods X and Y is

A. 0.66.
B. 1.75.
C. 2.0.
D. 1.5.

12) Refer to table below. Based on the information in the table, we could say that

557_Goods_1.jpg

A. all three goods are substitutes for each other.
B. all three goods are complements.
C. X and Y are substitutes, Y and Z are complements, and X and Z are substitutes.
D. X and Y are complements, Y and Z are substitutes, and X and Z are complements. 

13) Use the figure below. Which graph depicts complementary goods?

2335_Goods.jpg

A. A
B. B
C. C
D. D 

14) Income elasticity relates to

A. a movement down a demand curve.
B. a movement up a demand curve.
C. a horizontal shift in a demand curve.
D. the percentage change in quantity demanded divided by the percentage change in the price.

15) If demand for Rolls Royce automobiles rises in an area where incomes have increased, this tells us that Rolls Royce is

A. a normal good.
B. an inferior good.
C. a complementary good.
D. a substitute good.

16) The income elasticity of demand

A. is positive only.
B. is negative only.
C. must lie between -1 and +1.
D. can be positive, negative, or zero.

17) If price elasticity of supply of television sets is constant and equal to 3, a 10 percent increase in price would result in a change in quantity supplied equal to

A. 3 1/3 percent.
B. 30 percent.
C. 1/3 percent.
D. -30 percent.

18) If supply of a good is perfectly inelastic, the price elasticity of supply would equal

A. positive infinity.
B. one.
C. zero.
D. none of the above.

19) Supply curve for housing in the very short run is likely to be

A. very elastic.
B. very inelastic.
C. unit-elastic elastic.
D. perfectly elastic.

20) If price elasticity of supply is less than 1,

A. supply is elastic.
B. demand is elastic.
C. demand is inelastic.
D. supply is inelastic.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M92077

Have any Question?


Related Questions in Microeconomics

Question show the market for cigarettes in equilibrium

Question: Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in public. Label the equilibrium private market price and quantity as Pm and Qm. Add whatever is needed to the mode ...

Question recycling is a relatively inexpensive solution to

Question: Recycling is a relatively inexpensive solution to much of the environmental contamination from plastics, glass, and other waste materials. Is it a sound policy to make it mandatory for everybody to recycle? The ...

Question consider two ways of protecting elephants from

Question: Consider two ways of protecting elephants from poachers in African countries. In one approach, the government sets up enormous national parks that have sufficient habitat for elephants to thrive and forbids all ...

Question suppose you want to put a dollar value on the

Question: Suppose you want to put a dollar value on the external costs of carbon emissions from a power plant. What information or data would you obtain to measure the external [not social] cost? The response must be typ ...

Question in the tradeoff between economic output and

Question: In the tradeoff between economic output and environmental protection, what do the combinations on the protection possibility curve represent? The response must be typed, single spaced, must be in times new roma ...

Question consider the case of global environmental problems

Question: Consider the case of global environmental problems that spill across international borders as a prisoner's dilemma of the sort studied in Monopolistic Competition and Oligopoly. Say that there are two countries ...

Question consider two approaches to reducing emissions of

Question: Consider two approaches to reducing emissions of CO2 into the environment from manufacturing industries in the United States. In the first approach, the U.S. government makes it a policy to use only predetermin ...

Question the state of colorado requires oil and gas

Question: The state of Colorado requires oil and gas companies who use fracking techniques to return the land to its original condition after the oil and gas extractions. Table 12.9 shows the total cost and total benefit ...

Question suppose a city releases 16 million gallons of raw

Question: Suppose a city releases 16 million gallons of raw sewage into a nearby lake. Table shows the total costs of cleaning up the sewage to different levels, together with the total benefits of doing so. (Benefits in ...

Question four firms called elm maple oak and cherry produce

Question: Four firms called Elm, Maple, Oak, and Cherry, produce wooden chairs. However, they also produce a great deal of garbage (a mixture of glue, varnish, sandpaper, and wood scraps). The first row of Table 12.6 sho ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As