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1.
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THE PRICE ELASTICITY OF DEMAND COEFFICIENT MEASURES....
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RESPONSIVENESS TO PRICE CHANGES.
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2.
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THE BASIC FORMULA FOR THE PRICE ELASTICITY OF DEMAND COEFFICIENT IS
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PERCENTAGE CHANGE IN QUANTITY DEMANDED/PERCENTAGE CHANGE IN PRICE.
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3.
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IF THE PRICE ELASTICITY OF DEMAND FOR A PRODUCT IS 2.5, THEN A PRICE CUT FROM $2.00 TO $1.80 WILL
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INCREASE THE QUANTITY DEMANDED BY ABOUT 25 PERCENT.
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4.
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WHICH OF THE FOLLOWING IS NOT CHARACTERISTIC OF THE DEMAND FOR A COMMODITY THAT IS ELASTIC?
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THE ELASTICITY COEFFICIENT IS LESS THAN ONE.
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5.
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IF THE DEMAND FOR PRODUCT X IS INELASTIC, A 4 PERCENT INCREASE IN THE PRICE OF X WILL
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DECREASE THE QUANTITY OF X DEMANDED BY LESS THAN 4 PERCENT.
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6.
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A PERFECTLY INELASTIC DEMAND SCHEDULE
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CAN BE REPRESENTED BY A LINE PARALLEL TO THE VERTICAL AXIS.
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7.
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THE PRICE ELASTICITY OF DEMAND OF A STRAIGHT-LINE DEMAND CURVE IS
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ELASTIC IN HIGH-PRICE RANGES AND INELASTIC ON LOW-PRICE RANGES.
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8.
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A LEFTWARD SHIFT IN THE SUPPLY CURVE OF PRODUCT X WILL INCREASE EQUILIBRIUM PRICE TO A GREATER EXTENT THE
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MORE INELASTIC THE DEMAND FOR THE PRODUCT
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9.
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IF THE DEMAND FOR BACON IS RELATIVELY ELASTIC, A 10 PERCENT DECLINE IN THE PRICE OF BACON WILL
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INCREASE THE AMOUNT DEMANDED BY MORE THAN 10 PERCENT.
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10.
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THE PRICE ELASTICITY OF DEMAND IS:
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NEGATIVE, BUT THE MINUS SIGN IS IGNORED.
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11.
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THE PRICE ELASTICITY OF DEMAND FOR BEEF IS ABOUT 0.60. OTHER THINGS
EQUAL, THIS MEANS THAT A 20 PERCENT INCREASE IN THE PRICE OF BEEF WILL
CAUSE THE QUANTITY OF BEEF DEMANDED TO:
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DECREASE BY APPROXIMATELY 12 PERCENT.
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12.
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IF A DEMAND FOR A PRODUCT IS ELASTIC, THE VALUE OF THE PRICE ELASTICITY COEFFICIENT IS:
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GREATER THAN ONE
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13.
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IF THE PRICE OF HAND CALCULATORS FALLS FROM $10 TO $9 AND, AS A RESULT, THE QUANTITY DEMANDED INCREASES FROM 100 TO 125, THEN:
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DEMAND IS ELASTIC.
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14.
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MOVING UPWARD ON A DOWNWARD-SLOPING STRAIGHT-LINE DEMAND CURVE, WE FIND THAT PRICE ELASTICITY:
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INCREASES CONTINUOUSLY.
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15.
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IF THE PRICE ELASTICITY OF DEMAND FOR GASOLINE IS 0.20:
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A 10 PERCENT RISE IN THE PRICE OF GASOLINE WILL DECREASE THE AMOUNT PURCHASED BY 2 PERCENT.
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16.
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WHEN THE PERCENTAGE CHANGE IN PRICE IS GREATER THAN THE RESULTING PERCENTAGE CHANGE IN QUANTITY DEMANDED
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AN INCREASE IN PRICE WILL INCREASE TOTAL REVENUE.
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17.
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IN WHICH OF THE FOLLOWING INSTANCES WILL TOTAL REVENUE DECLINE?
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PRICE RISES AND DEMAND IS ELASTIC
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18.
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IF A PRICE REDUCTION REDUCES A FIRM'S TOTAL REVENUE:
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THE DEMAND FOR THE PRODUCT IS INELASTIC IN THIS PRICE RANGE.
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19.
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THE DEMANDS FOR SUCH PRODUCTS AS SALT, BREAD, AND ELECTRICITY TEND TO BE
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RELATIVELY PRICE INELASTIC.
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20.
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THE PRICE ELASTICITY OF SUPPLY MEASURES HOW
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RESPONSIVE THE QUANTITY SUPPLIED OF X IS TO CHANGES IN THE PRICE OF X.
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21.
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THE MAIN DETERMINANT OF ELASTICITY OF SUPPLY IS THE:
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AMOUNT OF TIME THE PRODUCER HAS TO ADJUST INPUTS IN RESPONSE TO A PRICE CHANGE.
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22.
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SUPPOSE THE SUPPLY OF PRODUCT X IS PERFECTLY INELASTIC. IF THERE IS AN
INCREASE IN THE DEMAND FOR THIS PRODUCT, EQUILIBRIUM PRICE:
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WILL INCREASE BUT EQUILIBRIUM QUANTITY WILL BE UNCHANGED.
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23.
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THE SUPPLY OF KNOWN MONET PAINTINGS IS
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PERFECTLY INELASTIC
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24.
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IF THE INCOME ELASTICITY OF DEMAND FOR LARD IS 3.00, THIS MEANS THAT
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LARD IS AN INFERIOR GOOD.
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25.
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THE FORMULA FOR CROSS ELASTICITY OF DEMAND IS PERCENTAGE CHANGE IN:
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QUANTITY DEMANDED OF X/PERCENTAGE CHANGE IN PRICE OF Y.
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26.
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THE LARGER THE POSITIVE CROSS ELASTICITY COEFFICIENT OF DEMAND BETWEEN PRODUCTS X AND Y, THE:
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GREATER THEIR SUBSTITUTABILITY
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27.
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WE WOULD EXPECT THE CROSS ELASTICITY OF DEMAND BETWEEN DRESS SHIRTS AND TIES TO BE
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NEGATIVE, INDICATING COMPLEMENTARY GOODS.
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28.
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THE DIFFERENCE BETWEEN THE MAXIMUM PRICES CONSUMERS ARE WILLING TO PAY FOR A PRODUCT AND THE LOWER EQUILIBRIUM PRICE IS
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CONSUMER SURPLUS:
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