Question 1
Question
If the price of a good increases by 15%and the quantity demanded changes by 20%, then the price elasticity of demand is
Question 2
Question
The university hopes to increase revenue by increasing parking fees. This plan will only work if
Answer
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The price effect is larger than the quantity effect
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the price effect is smaller than the quantity effect
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the price effect and quantity effect are the same
Question 3
Question
For an inferior good, elasticity of demand will be
Question 4
Question
a demand curve that is perfectly inelastic is
Answer
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vertical
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horizontal
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downward sloping
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upward sloping
Question 5
Question
The burden on the tax that is imposed on a good is said to fall completely on the consumers if
Answer
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price paid by consumers for good declines by the amount of tax
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price paid by consumers for good increases by the amount of tax
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price paid by consumers does no change
Question 6
Question
at whatever quantity_________, the decision maker should do________ of the activity
Answer
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MB<MC, that amount
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MB<MC, less
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MB>MC, less
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MB>MC, none
Question 7
Question
Use the midpoint method to determine price elasticity of demand if: Price decreases from $2.50 to $2.25 and quantity demand per period increases from 0 to 25.
Question 8
Question
If these countries used all of their resources, this is the amount of each product they could produce.
Spain: 50 pounds of wheat, 100 toys
America: 25 pounds of wheat, 75 toys
Spain has an absolute advantage in___________ and a comparative advantage in__________. America has the comparative advantage in________.
Question 9
Question
Which of the following is true about price elasticity of demand
Answer
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inelastic demand < 1
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elastic demand < 1
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unit elastic demand < 1
Question 10
Question
Increase price will increase revenue if demand is
Answer
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elastic
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inelastic
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unit elastic
Question 11
Question
If a company sold 1,100 units at $0.90 each, what is total revenue?
Question 12
Question
A luxury tends to be more___________, while necessity is more__________.
Answer
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elastic, inelastic
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inelastic, elastic