8329065
Description
Quiz by Michaela Juric-Donlan, updated more than 1 year ago
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Created by Michaela Juric-Donlan
over 7 years ago
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Question 1
Question
The price elasticity of demand is a measure of
Answer
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the amount of a product purchased when income increases.
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how much a change in demand affects the equilibrium price.
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he equilibrium price of a product
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buyers' responsiveness to changes in the price of a product
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whether a product is a substitute or a complement.
Question 2
Question
The price elasticity of demand calculated as the ________ divided by the ________.
Answer
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change in quantity demanded; change in price
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change in price; change in the quantity demanded
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percentage change in the quantity demanded; percentage change in price
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percentage change in the quantity demanded; change in price
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percentage change in price; percentage change in the quantity demanded
Question 3
Question
Suppose that a 5% increase in the price of a book resulted in a 2.5% decrease in the quantity demanded of the book. The price elasticity of demand for the book is ________, which can be described as ________.
Answer
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2, unit elastic.
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0.5, elastic
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2.5, elastic
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2.5, inelastic
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0.5, inelastic
Question 4
Question
If a good has many close substitutes, then its demand is most likely
Answer
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Unit Elastic
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Elastic
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Perfectly inelastic
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inelastic
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elastic or inelastic depending on whether the price of the good is increasing or decreasing
Question 5
Question
Which of the following is true?
i. The easier it is to find substitutes for a good, the more price elastic the demand for the good is.
ii. The demand for a good is more price elastic the smaller the proportion of income spent on it.
iii. If demand is price elastic, lowering the price leads to a decrease in total revenue.
Answer
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Only i
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Only ii
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Only iii
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i and ii
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i and iii
Question 6
Question
When we use the midpoint method to compute the price elasticity of demand we use
Answer
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The original price and the average quantity
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The original quantity and the average price
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The average price ad the original quantity
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The average price and the average quantity
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Either the original or new price, and the average quantity
Question 7
Question
What is measured by the price elasticity of supply?
Answer
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The price elasticity of supply measures how responsive producers are to changes in income
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The price elasticity of supply measures how responsive producers are to changes in the price of other goods.
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The price elasticity of supply measures how responsive producers are to changes in the price of a product.
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The price elasticity of supply is a measure of the slope of the supply curve.
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The price elasticity of supply measures how responsive producers are to changes in the cost of producing a product
Question 8
Question
If the price elasticity of supply for a good is 10, then supply is
Answer
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Elastic
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Perfectly Elastic
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Unit Elastic
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Inelastic
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Perfectly inelastic
Question 9
Question
The extent to which the demand for a good changes when the price of a substitute or complement changes, other things remaining the same, is measured as the
Answer
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price elasticity of supply
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cross elasticity of demand
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price elasticity of demand
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income elasticity of demand
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cross income elasticity of demand
Question 10
Question
The income elasticity of demand is ____________ if the good is ___________ good.
Answer
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positive; an inferior
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less than one; an inferior
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positive; a substitute
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negative; a normal
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positive; a normal
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