Question

**(64)Suppose that the quantity of oranges sold increases
by 45 percent when the price of tangerines increases by 25 percent.
What is the coefficient of cross price elasticity of demand for
these fruits?**

(a)2.5

(b)3.2

(c)1.8

(d)0.3

**(65)Given the coefficient of cross price elasticity of
demand for the fruits in Q#64 above, which of the following
statements is true?**

(a)They are complements

(b)Their demand curve is negatively sloped

(c)Their cross elasticity of demand is negative

(d)None of the above

**(66)Which of the following statements is
true?**

**In the very short run period:**

(a)The price elasticity of supply is very elastic

(b)The price elasticity of demand is very elastic

(c)The price elasticity of supply is very inelastic

(d)Income elasticity of demand is perfectly elastic

**(67)Suppose that when the price of cherries is $10 per
lb, the quantity supplied of cherries is 20 lbs. When price of
cherries is $6 per lb, the quantity supplied of cherries is 12 lbs.
The price elasticity of supply is:**

(a)1.7

(b)1.0

(c)2.5

(d)0.8

**(69)Suppose you are a member of a local soccer club. The
goal of your soccer club is to increase the amount of revenue
earned from ticket sales in the local competition. Two executives
of the soccer club, Evadney and Felix suggest that the solution is
to increase ticket prices. Are Evadney and Felix
correct?**

(a)They are correct if the demand for tickets is price elastic

(b)They are correct if the demand for tickets is unitary elastic

(c)They are correct if the demand for tickets is price inelastic

(d)They are incorrect if the demand for tickets is price inelastic`

**(72)Which of the following statements is
true?**

**Suppose CD players are classified as normal goods then
it would be expected that:**

(a)Consumers buy less when the price falls and vice versa

(b)Consumers buy less when income rises and vice versa

(c)Consumers buy more when income rises and vice versa

(d)More information needed to answer this question

Answer #1

**64**. **Option C.** 1.8

**Explanation**: Coefficient of cross-price
elasticity of demand = % change in quantity demanded / % change in
price = 45/25 = 1.8

**65**. **Option D**. None of the
above

**Explanation**: When the price of one good
increases and the quantity demanded of another good increase
because of that, the goods are substitutes.

**66**. **Option C**. The price
elasticity of supply is very inelastic

**Explanation**: It takes time to make an
adjustment to supply. So, in the very short-run, supply is
inelastic.

(67)Suppose that when the price of cherries is $10 per
lb, the quantity supplied of cherries is 20 lbs. When price of
cherries is $6 per lb, the quantity supplied of cherries is 12 lbs.
The price elasticity of supply is:
(a)1.7
(b)1.0
(c)2.5
(d)0.8
(69)Suppose you are a member of a local soccer club. The
goal of your soccer club is to increase the amount of revenue
earned from ticket sales in the local competition. Two executives
of the...

(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...

8.
When the price increases by 30 percent and the quantity demanded
drops by 30 percent, the price elasticity of demand is
unitary elastic.
elastic.
perfectly inelastic.
inelastic.
perfectly inelastic.
9.
If the cross-price elasticity of demand between Good A and Good
B is 2 and the percentage change in price of Good A is 5 percent,
what is the percentage change in quantity demanded of Good B?
-3 percent
1.50 percent
10 percent
3 percent
-1.25 percent

5. Suppose that Bobo purchases 1 pizza per month when the price
is $19 and 3 pizzas per month when the price is $15. What is the
price elasticity of Bobo’s demand curve?
Multiple Choice
a.0.235
b.2.00
c.4.25
d.6.33
6. Suppose that Mimi plays golf 5 times per month when the price
is $40 and 4 times per month when the price is $50. What is the
price elasticity of Mimi’s demand curve?
Multiple Choice
a.0.1
b.0.8
c.10.0
d.1.0
7....

5a)The price of car batteries increases by 10 percent and the
quantity demanded decreases by 10 percent. What is the price
elasticity of car batteries?
Unit elastic, and revenue will not change
Elastic, and revenue will increase
Elastic, and revenue will decrease
Inelastic, and revenue will increase
b)Good A and Good B have negative income elasticities, but Good
A is more negative than Good B. If the economy’s income increases,
which of the following is true?
Good A’s demand will...

Suppose when the price of HDTV decreased by 10 percent, the
quantity supplied decreased by 18 percent. Based on this
information, determine what happens to the revenue received by
suppliers.
A. Revenue increases because supply is elastic
B. Revenue decreases because supply is inelastic
C. Revenue increases because price increases
D. We cannot determine what happens to revenue based on
information about the price elasticity of supply

When the price of good "X" increases 20 percent (+20%), Harry
decreases his quantity demanded of "X" by 25 percent while Meghan
decreases her quantity demanded of "X" by 15 percent. Harry's
demand for good "X" is (relatively inelastic / unitary elastic /
relatively elastic) and Meghan's demand for good "X" is (relatively
inelastic / unitary elastic / relatively elastic).
A. Relatively inelastic; relatively
inelastic.
B. Relatively inelastic; relatively
elastic.
C. Unitary elastic; relatively
elastic.
D. Relatively elastic; relatively
elastic.

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...

When the price is $2, quantity demanded is 10. When the price
rises to $8, quantity demanded falls to 2.
What is the value of the elasticity of demand? Is it elastic or
inelastic?

A 10 percent increase in the price of soda leads to a 20 percent
increase in the quantity of iced tea demanded. It appears that:
a) elasticity of demand for soda 0.5 and is inelastic.
b) elasticity of demand for iced tea is 2 and is elastic.
c) cross-price elasticity of demand for soda is -0.5.
d) cross-price elasticity of demand for iced tea is 2.

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