Economics Final Exam [Chap. 5-6]

A good will tend to have an inelastic demand if

A perfectly elastic demand is represented graphically by a:

What effect will an increase in the price have on total revenue, if demand is elastic?

The price elasticity of demand tends to be more elastic:

Suppose that General Cars increases the price of its Cadillac model from $13,500 to 16,500. As a result of this the quantity demanded of the Cadillac model decreases from $600,000 to $400,000 per year. Find the price elasticity of demand of the Cadillac.

If a firm needs to increase its total revenue, the firm should ________ the price, if the demand for its product is:

Suppose that consumers income rise by 3% and that this causes the quantity demanded for a good to increase by 4.5%. What is the income elasticity of demand?

Suppose that a good has an income elasticity of -2.0. This means that the good is:

Suppose that two goods have a cross price elasticity of -0.8, this means that these goods are:

The price of good A increases from $4.50 to $5.50. This causes the quantity demanded of good B to increase from 900 to 1100 units per month. Find the cross price elasticity of demand.

Suppose that a regulation is in place that does not allow the price of a good to exceed $5. If this price is above the equilibrium price in the market, this would be an example of a:

Suppose that a regulation is in place that does not allow the price of a good to fall below $10. If this price is above the equilibrium price in the market, this would be an example of a:

Suppose that a regulation is in place that does not allow the price of a good to exceed $5. If this price is below the equilibrium price in the market, this would be an example of a:

If a price floor is in place and it is binding, the market will:

If a price ceiling is in place and it is binding, the market will:

If a price floor is in place and it is not binding, the market will:

If a tax is imposed on buyers of a good, the ________ curve of the good will shift ________ by the amount of the tax.

If a tax is imposed on sellers of a good, the ________ curve of the good will shift ________ by the amount of the tax.

If a tax is imposed on a good and the incidence of the tax ends up falling more heavily on the sellers than on the buyers, this will be because:

If a tax is imposed on a good and the incidence of the tax ends up falling more heavily on the buyers than on the sellers, this will be because: