Question

3.Factors that affect a product’s price elasticity of demand are

A. availability of close substitutes.

B. passage of time.

C. necessity versus luxury.

D. definition of the market.

E. All of the above are correct.

4. If a price increase causes a decrease in total revenues (total expenditures), then the product is considered to be

A. price elastic.

B. price inelastic.

C. unitary elastic.

D. All of the above are correct.

E.None of the above are correct.

5.Price elasticity of demand is equal to the slope of the demand curve.

A.True

B. False

6.For most consumers, a snack food such as potato chips has a price elasticity of demand that is

A. unitary elastic.

B. perfectly inelastic.

C. extremely elastic, almost perfectly elastic.

D.All of the above are correct.

E. None of the above are correct.

7.When the price of a taco falls by 10%, the quantity of pizza demanded decreases by 5%. The cross elasticity of demand for pizza with respect to the price of a taco is

A. 2.0

B. -2.0

C 0.50

D. -0.50

E. cannot be determined with the given information.

8. When the price of a taco falls by 10%, the quantity of pizza demanded decreases by 5%. The cross elasticity of demand for pizza with respect to the price of a taco demonstrates that tacos and pizza are

A.substitute goods.

B. complementary goods.

C. factors of production.

D. intermediate goods.

E. cannot be determined with the given information.

9.In the long run, demand is likely to become more elastic because consumers are able to make changes with fewer constraints.

A. True

B. False

10. If the cross elasticity of bananas and apples is positive, this indicates that bananas and apples are

A. complementary goods.

B. substitute goods.

C. unrelated goods.

D. public goods.

E. low demand goods.

Answer #1

Determine the price elasticity of demand, the cross-price
elasticity of demand or the income elasticity in the following
scenarios.
a. Consider the market for coffee. Suppose the price rises from
$4 to $6 and quantity demanded falls from 120 to 80. What is price
elasticity of demand? Is coffee elastic or inelastic?
b. John’s income rises from $20,000 to $22,000 and the quantity
of hamburger he buys each week falls from 2 pounds to 1 pound. What
is his income...

What is price elasticity of demand?
What determines whether a product’s demand is elastic, inelastic,
unitary elastic, perfectly elastic and perfectly inelastic? What is
mid-point formula to determine the elasticity of demand and why is
it important to use it instead of the general formula for
elasticity? Carefully explain.

(60)A perfectly inelastic demand curve has an elasticity
coefficient of:
(a)1
(b)0.25
(c)∞
(d)None of the above
Akal mn wahed
Extra Credit Questions-Optional
(61)If the percentage change in the quantity supplied of
a good is less than the percentage change in price, price
elasticity of supply is:
(a)Inelastic
(b)Perfectly inelastic
(c)Elastic
(d)Unitary elastic
(62)If the percentage change in the quantity demanded of
a good is equal to the percentage change in price, price elasticity
of demand is:
(a)Inelastic
(b)Perfectly inelastic...

Over time, the price elasticity of supply for sunglasses will
become more:
a. inelastic.
b. unitary elastic.
c. unchanged.
d. elastic.
e. perfectly elastic.
If the price elasticity of supply is 2.5, we know that it
is:
a. perfectly elastic.
b. perfectly inelastic.
c. unitary elastic.
d. relatively inelastic.
e. relatively elastic.

In each case below, what is the value of the price elasticity
of demand? Is demand perfectly inelastic, inelastic, unit elastic,
elastic or perfectly elastic?
Price falls by 10%, quantity demanded rises by 8%
Price rises by 3%, quantity demanded falls by 3%
Price rises by 1%, quantity demanded falls by 5%
Price rises by 5%, quantity demanded collapses to zero
Price falls by 2%, quantity demanded does not change

Cross-price elasticity of demand is
a. negative for complementary goods.
b. negative for substitute goods.
c. positive for general goods.
d. unitary for secondary goods.

1.If price rises by 20% and quantity demanded of rice falls by
100 pounds, the elasticity of demand is : (1 point)
a. greater than 1
b. equal to -5
c. equal to -20
d. cannot be determined without additional information.
2.If quantity supplied responds only slightly to a change in
price, then: (1 point)
a. Supply is elastic
b. An increase in price will shift the supply curve to a large
extent
c. Supply is inelastic
d. Supply is...

1) Using the midpoint method, the price elasticity of demand is
determined to be about 0.85. If there is a 10% decrease in the
quantity demanded of the product then what effect would this have
on the price of the product?
A decrease in the price of the product from $8.50 to $10
A 11.8% increase in the price of the product
An increase in the price of the product from $8.50 to $10
2)The ________ is negative for complementary...

1. Given that the price of a shirt decreased (in 2008) from
$35.00 per shirt with 40 thousand shirts demanded and (in 2009) to
$25.00 per shirt with 80 thousand shirts demanded. Using the
midpoint formula, calculate the price elasticity of demand for
shirts.
A.|0.10|
B.|-0.20|
C.|1.0|
D.|-2.0|
E.|-0.05|
3.For most consumers, a snack food such as potato chips has a
price elasticity of demand that is
unitary elastic.
A.perfectly inelastic.
B.extremely elastic, almost perfectly elastic.
C.All of the above...

Taking the absolute value of the cross-price elasticity of
demand is incorrect because it would:
remove the ability to tell whether the two products have
inelastic demand or elastic demand.
cause the value of the cross-price elasticity of demand to
become smaller.
remove the ability to tell whether the two products are
substitutes or complements.
cause the value of the cross-price elasticity of demand to
become zero.
The percent change in insulin demanded for any price change is
zero. The...

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