Principles of Macroeconomics 8th Edition Gregory Mankiw - Test Bank Instant Download - Complete Test Bank With Answers Sample Questions Are Posted Below 1. The price elasticity of supply measures how much a. the quantity supplied responds to changes in input prices. b. the quantity supplied responds to changes in …
$19.99
Principles of Macroeconomics 8th Edition Gregory Mankiw – Test Bank
Instant Download – Complete Test Bank With Answers
Sample Questions Are Posted Below
1. The price elasticity of supply measures how much
|
2. The price elasticity of supply measures how responsive
|
3. The price elasticity of supply measures how responsive
|
4. If the quantity supplied responds only slightly to changes in price, then
|
5. A linear, upward-sloping supply curve has
|
6. A key determinant of the price elasticity of supply is the time period under consideration. Which of the following statements best explains this fact?
|
7. A key determinant of the price elasticity of supply is the
|
8. A key determinant of the price elasticity of supply is the
|
9. A key determinant of the price elasticity of supply is
|
10. If the price elasticity of supply for wheat is less than 1, then the supply of wheat is
|
11. The supply of a good will be more elastic, the
|
12. Frequently, in the short run, the quantity supplied of a good is
|
13. In the long run, the quantity supplied of most goods
|
14. Some firms eventually experience problems with their capacity to produce output as their output levels increase. For these firms,
|
15. Generally, a firm is more willing and able to increase quantity supplied in response to a price change when
|
16. The price elasticity of supply along a typical supply curve is
|
17. Suppose that two supply curves pass through the same point. One is steep, and the other is flat. Which of the following statements is correct?
|
18. When a supply curve is relatively flat, the
|
19. When a supply curve is relatively flat,
|
20. As price elasticity of supply increases, the supply curve
|
21. If the price elasticity of supply is 1.5, and a price increase led to a 1.8% increase in quantity supplied, then the price increase is about
|
22. If the price elasticity of supply is 0.4, and a price increase led to a 5% increase in quantity supplied, then the price increase is about
|
23. If the price elasticity of supply is 1.5, and a price increase led to a 3% increase in quantity supplied, then the price increase is about
|
24. If the price elasticity of supply is 1.2, and a price increase led to a 5% increase in quantity supplied, then the price increase is about
|
25. If the price elasticity of supply is 1.2, and price increased by 5%, quantity supplied would
|
26. If the price elasticity of supply is 0.8, and price increased by 5%, quantity supplied would
|
27. If a 25% change in price results in a 40% change in quantity supplied, then the price elasticity of supply is about
|
28. If a 40% change in price results in a 25% change in quantity supplied, then the price elasticity of supply is about
|
29. If a 15% change in price results in a 20% change in quantity supplied, then the price elasticity of supply is about
|
30. If a 20% change in price results in a 15% change in quantity supplied, then the price elasticity of supply is about
|
31. If a 30 percent change in price causes a 15 percent change in quantity supplied, then the price elasticity of supply is about
|
32. Suppose the price elasticity of supply for cheese is 0.6 in the short run and 1.4 in the long run. If an increase in the demand for cheese causes the price of cheese to increase by 15%, then the quantity supplied of cheese will increase by
|
33. Suppose the price elasticity of supply for soccer balls is 0.3 in the short run and 1.2 in the long run. If an increase in the demand for soccer balls causes the price of soccer balls to increase by 20%, then the quantity supplied of soccer balls will increase by about
|
34. Suppose the price elasticity of supply for minivans is 0.3 in the short run and 1.2 in the long run. If an increase in the demand for minivans causes the price of minivans to increase by 5%, then the quantity supplied of minivans will increase by about
|
35. If the price elasticity of supply for a window manufacturer is 1.5,
|
36. In which of the following situations would supply be the most elastic?
|
| Scenario 5-3 Suppose that the supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tax increase decreases the demand for both goods by 10%. |
37. Refer to Scenario 5-3. The price elasticity of supply for aged cheddar cheese could be
|
38. Refer to Scenario 5-3. The price elasticity of supply for bread could be
|
| Table 5-9
|
|||||||||||||||||||||
39. Refer to Table 5-9. Which of the three supply curves represents the least elastic supply?
|
40. Refer to Table 5-9. Which of the three supply curves represents the most elastic supply?
|
41. Refer to Table 5-9. Along which of the supply curves does quantity supplied move proportionately more than the price?
|
| Table 5-10
|
|||||||||||||||||||||
42. Refer to Table 5-10. Using the midpoint method, which of the three supply curves has the most inelastic price elasticity of supply?
|
43. Refer to Table 5-10. Using the midpoint method, which of the three supply curves has the most elastic price elasticity of supply?
|
44. A manufacturer produces 400 units when the market price is $10 per unit and produces 600 units when the market price is $12 per unit. Using the midpoint method, for this range of prices, the price elasticity of supply is about
|
45. At a price of $1.00, a local coffee shop is willing to supply 100 cinnamon rolls per day. At a price of $1.20, the coffee shop would be willing to supply 150 cinnamon rolls per day. Using the midpoint method, the price elasticity of supply is about
|
46. At a price of $1.20, a local coffee shop is willing to supply 100 cinnamon rolls per day. At a price of $1.40, the coffee shop would be willing to supply 150 cinnamon rolls per day. Using the midpoint method, the price elasticity of supply is about
|
47. On a certain supply curve, one point is (quantity supplied = 200, price = $4.00) and another point is (quantity supplied = 250, price = $4.50). Using the midpoint method, the price elasticity of supply is about
|
48. On a certain supply curve, one point is (quantity supplied = 200, price = $2.00) and another point is (quantity supplied = 250, price = $2.50). Using the midpoint method, the price elasticity of supply is about
|
49. Holding all other factors constant and using the midpoint method, if a candy manufacturer increases production by 20 percent when the market price of candy increases from $0.50 to $0.60, then supply is
|
50. Holding all other factors constant and using the midpoint method, if a tractor manufacturer increases production from 80 to 100 units when price increases by 15 percent, then supply is
|
51. Suppose that an increase in the price of melons from $1.30 to $1.80 per pound increases the quantity of melons that melon farmers produce from 1.2 million pounds to 1.6 million pounds. Using the midpoint method, what is the approximate value of the price elasticity of supply?
|
52. An increase in the price of cheese crackers from $2.25 to $2.45 per box causes suppliers of cheese crackers to increase their quantity supplied from 125 boxes per minute to 145 boxes per minute. Using the midpoint method, supply is
|
53. A bakery would be willing to supply 500 bagels per day at a price of $0.50 each. At a price of $0.80, the bakery would be willing to supply 1,100 bagels. Using the midpoint method, the price elasticity of supply for bagels is about
|
54. A t-shirt maker would be willing to supply 75 t-shirts per day at a price of $18.00 each. At a price of $20.00, the t-shirt maker would be willing to supply 100 t-shirts. Using the midpoint method, the price elasticity of supply for t-shirts is about
|
55. In January the price of dark chocolate candy bars was $2.00, and Willy’s Chocolate Factory produced 80 pounds. In February the price of dark chocolate candy bars was $2.50, and Willy’s produced 110 pounds. In March the price of dark chocolate candy bars was $3.00, and Willy’s produced 140 pounds. The price elasticity of supply of Willy’s dark chocolate candy bars was about
|
56. In January the price of widgets was $1.00, and Wendy’s Widgets produced 80 widgets. In February the price of widgets was $1.50, and Wendy’s Widgets produced 110 widgets. In March the price of widgets was $2.00, and Wendy’s Widgets produced 140 widgets. The price elasticity of supply of Wendy’s Widgets was about
|
57. At price of $1.20, a local pencil manufacturer is willing to supply 150 boxes per day. At a price of $1.40, the manufacturer is willing to supply 170 boxes per day. Using the midpoint method, the price elasticity of supply is about
|
58. At price of $1.30 per pound, a local apple orchard is willing to supply 150 pounds of apples per day. At a price of $1.50 per pound, the orchard is willing to supply 170 pounds of apples per day. Using the midpoint method, the price elasticity of supply is about
|
59. At price of $1.25, a paper manufacturer is willing to supply 150 spiral notebooks per day. At a price of $1.50, the paper manufacturer is willing to supply 175 spiral notebooks per day. Using the midpoint method, the price elasticity of supply is about
|
| Figure 5-14 |
60. Refer to Figure 5-14. Over which range is the supply curve in this figure the most elastic?
|
61. Refer to Figure 5-14. Over which range is the supply curve in this figure the least elastic?
|
62. Refer to Figure 5-14. Using the midpoint method, what is the price elasticity of supply between $16 and $40?
|
63. Refer to Figure 5-14. Using the midpoint method, what is the price elasticity of supply between $100 and $220?
|
| Figure 5-15 |
64. Refer to Figure 5-15. Along which of these segments of the supply curve is supply least elastic?
|
65. Refer to Figure 5-15. Along which of these segments of the supply curve is supply most elastic?
|
66. Refer to Figure 5-15. Using the midpoint method, what is the price elasticity of supply between points A and B?
|
67. Refer to Figure 5-15. Using the midpoint method, what is the price elasticity of supply between points B and C?
|
68. Refer to Figure 5-15. Using the midpoint method, what is the price elasticity of supply between points C and D?
|
69. Refer to Figure 5-15. Using the midpoint method, what is the price elasticity of supply between points D and G?
|
| Figure 5-16 |
70. Refer to Figure 5-16. Using the midpoint method, what is the price elasticity of supply between $4 and $6?
|
71. Refer to Figure 5-16. Using the midpoint method, what is the price elasticity of supply between $6 and $8?
|
| Figure 5-17 |
72. Refer to Figure 5-17. Using the midpoint method, what is the price elasticity of supply between point A and point B?
|
73. Refer to Figure 5-17. Using the midpoint method, what is the price elasticity of supply between point B and point C?
|
74. Refer to Figure 5-17. If, holding the supply curve fixed, there were an increase in demand that caused the equilibrium price to increase from $6 to $7, then sellers’ total revenue would
|
| Figure 5-18 |
75. Refer to Figure 5-18. Using the midpoint method, what is the price elasticity of supply between $4 and $5?
|
76. Refer to Figure 5-18. Using the midpoint method, what is the price elasticity of supply between $5 and $6?
|
77. If sellers respond to very small changes in price by adjusting their quantity supplied by extremely large amounts, the price elasticity of supply approaches
|
78. Which of the following statements is valid when supply is perfectly elastic at a price of $4?
|
79. Which of the following statements is not valid when supply is perfectly elastic?
|
80. When supply is perfectly elastic, the value of the price elasticity of supply is
|
81. As the price elasticity of supply approaches infinity, very small changes in price lead to
|
82. If the price elasticity of supply for a good is equal to infinity, then the
|
83. A manufacturer produces 1,000 units, regardless of the market price. For this firm, the price elasticity of supply is
|
84. If sellers do not adjust their quantity supplied at all in response to a change in price, the price elasticity of supply is
|
85. Which of the following statements is valid when the market supply curve is vertical?
|
86. Which of the following statements is not valid when the market supply curve is vertical?
|
87. If the quantity supplied is the same regardless of price, then supply is
|
88. If sellers do not adjust their quantities supplied at all in response to a change in price,
|
89. If the price elasticity of supply is zero, then
|
90. Which of the following is an illustration of the market for original paintings by deceased artist Vincent Van Gogh?
|
| Figure 5-19 |
91. Refer to Figure 5-19. Which of the following statements is not correct?
|
92. Refer to Figure 5-19. Which of the following statements is correct?
|
| Figure 5-20 |
93. Refer to Figure 5-20. Which supply curve is most likely relevant over a very long period of time?
|
94. Refer to Figure 5-20. Which supply curve represents perfectly inelastic supply?
|
95. A candle manufacturer produces 4,000 units when the market price is $11 per unit and produces 6,000 units when the market price is $13 per unit. Using the midpoint method, for this range of prices, the price elasticity of supply is about
|
96. A tax accounting firm produces 500 tax returns units when the market price is $150 per return and produces 700 tax returns when the market price is $170 per tax return. Using the midpoint method, for this range of prices, the price elasticity of supply is about
|
1. In general, elasticity is a measure of
|
2. Elasticity is
|
3. When studying how some event or policy affects a market, elasticity provides information on the
|
4. When studying how some event or policy affects a market, elasticity provides information on the
|
5. How does the concept of elasticity allow us to improve upon our understanding of supply and demand?
|
6. When consumers face rising gasoline prices, they typically
|
7. A 10 percent increase in gasoline prices reduces gasoline consumption by about
|
8. Which of the following statements about the consumers’ responses to rising gasoline prices is correct?
|
9. Which of the following statements about the consumers’ responses to rising gasoline prices is correct?
|
1. The price elasticity of demand measures how much
|
2. The price elasticity of demand measures
|
3. The price elasticity of demand for a good measures the willingness of
|
4. Which of the following statements about the price elasticity of demand is correct?
|
5. Demand is said to be price elastic if
|
6. Demand is said to be inelastic if
|
7. If demand is price inelastic, then
|
8. If the quantity demanded of a certain good responds only slightly to a change in the price of the good, then the
|
9. When quantity demanded responds strongly to changes in price, demand is said to be
|
10. Demand is said to be inelastic if the
|
11. Demand is elastic if the price elasticity of demand is
|
12. Demand is inelastic if the price elasticity of demand is
|
13. Which of the following is not a determinant of the price elasticity of demand for a good?
|
14. The smaller the price elasticity of demand, the
|
15. Whether a good is a luxury or necessity depends on the
|
16. Goods with many close substitutes tend to have
|
17. For a good that is a luxury, demand
|
18. For a good that is a necessity, demand
|
19. A good will have a more elastic demand, the
|
20. The value of the price elasticity of demand for a good will be relatively large when
|
21. For a good that is a necessity,
|
22. A good will have a more inelastic demand, the
|
23. Other things equal, the demand for a good tends to be more inelastic, the
|
24. If the price of natural gas rises, when is the price elasticity of demand likely to be the highest?
|
25. If the price of gasoline rises, when is the price elasticity of demand likely to be the highest?
|
26. If the price of milk rises, when is the price elasticity of demand likely to be the lowest?
|
27. The price elasticity of demand for bread
|
28. Holding all other forces constant, when the price of gasoline rises, the number of gallons of gasoline demanded would fall substantially over a ten-year period because
|
29. The price elasticity of demand for mobile phones
|
30. The price elasticity of demand measures the
|
31. If the price of walnuts rises, many people would switch from consuming walnuts to consuming pecans. But if the price of salt rises, people would have difficulty purchasing something to use in its place. These examples illustrate the importance of
|
32. Suppose that Jane enjoys Diet Coke so much that she consumes one can every day. Although she enjoys gourmet cheese, she consumes it sporadically. If the price of Diet Coke rises, Jane decreases her consumption by only a very small amount. But if the price of gourmet cheese rises, Jane decreases her consumption by a lot. These examples illustrate the importance of
|
33. Suppose that Juan Carlos is filling out a survey that he received in the mail. The survey asks him what he would do if the price of his favorite toothpaste increased. Juan Carlos reports that he would switch to a different brand. The survey asks what he would do if the price of all toothpastes increased. Juan Carlos reports that he must use toothpaste, so he would have to adjust his spending elsewhere. These examples illustrate the importance of
|
34. Suppose that gasoline prices increase dramatically this month. Lola commutes 100 miles to work each weekday. Over the next few months, Lola drives less on the weekends to try to save money. Within the year, she sells her home and purchases one only 10 miles from her place of employment. These examples illustrate the importance of
|
35. The demand for Godiva mint chocolates is likely quite elastic because
|
36. The demand for grape-flavored Hubba Bubba bubble gum is likely
|
37. Which of the following statements is correct?
|
38. Which of the following statements is correct?
|
39. Which of the following is likely to have the most price elastic demand?
|
40. Which of the following is likely to have the most price elastic demand?
|
41. Which of the following is likely to have the most price elastic demand?
|
42. Which of the following is likely to have the most price elastic demand?
|
43. Which of the following is likely to have the most price elastic demand?
|
44. Which of the following is likely to have the most price inelastic demand?
|
45. Which of the following is likely to have the most price inelastic demand?
|
46. Which of the following is likely to have the most price inelastic demand?
|
47. Which of the following is likely to have the most price inelastic demand?
|
48. Which of the following is likely to have the most price inelastic demand?
|
49. Which of the following is likely to have the most price inelastic demand?
|
50. Which of the following is likely to have the most price inelastic demand?
|
51. Which of the following is likely to have the most price inelastic demand?
|
52. Which of the following is likely to have the most price inelastic demand?
|
53. For which of the following goods is the price elasticity of demand most inelastic?
|
54. A person who takes a prescription drug to control high cholesterol most likely has a demand for that drug that is
|
55. There are very few, if any, good substitutes for motor oil. Therefore, the
|
56. There are very few, if any, good substitutes for automotive tires. Therefore, the demand for automotive tires would tend to be
|
57. Economists compute the price elasticity of demand as the
|
58. The midpoint method is used to compute elasticity because it
|
59. The midpoint method for calculating elasticities is convenient in that it allows us to
|
60. Which of the following expressions is valid for the price elasticity of demand?
|
61. Which of the following expressions can be used to compute the price elasticity of demand?
|
62. When the price of candy bars is $1.00, the quantity demanded is 500 per day. When the price falls to $0.80, the quantity demanded increases to 600. Given this information and using the midpoint method, we know that the demand for candy bars is
|
63. Suppose the price of a bag of frozen chicken nuggets decreases from $6.50 to $5.75 and, as a result, the quantity of bags demanded increases from 600 to 800. Using the midpoint method, the price elasticity of demand for frozen chicken nuggets in the given price range is
|
64. Using the midpoint method, the price elasticity of demand for a good is computed to be approximately 0.75. Which of the following events is consistent with a 10 percent decrease in the quantity of the good demanded?
|
65. Using the midpoint method, the price elasticity of demand for a good is computed to be approximately 2. Which of the following events is consistent with a 0.1 percent increase in the price of the good?
|
66. When the price of a good is $5, the quantity demanded is 100 units per month; when the price is $7, the quantity demanded is 80 units per month. Using the midpoint method, the price elasticity of demand is about
|
67. When the price of a good is $5, the quantity demanded is 120 units per month; when the price is $7, the quantity demanded is 100 units per month. Using the midpoint method, the price elasticity of demand is about
|
68. When the price of a bracelet was $28 each, the jewelry shop sold 128 per month. When it raised the price to $32 each, it sold 112 per month. Using the midpoint method, the price elasticity of demand for bracelets is
|
69. When the price of an eBook is $15.00, the quantity demanded is 400 eBooks per day. When the price falls to $10.00, the quantity demanded increases to 700. Given this information and using the midpoint method, we know that the demand for eBooks is
|
70. Suppose the price of a bag of tortilla chips decreases from $3.00 to $2.50 and, as a result, the quantity of tortilla chips demanded increases from 200 bags to 300 bags. Using the midpoint method, the price elasticity of demand for tortilla chips in the given price range is
|
71. Suppose that 50 ice cream cones are demanded at a particular price. If the price of ice cream cones rises from that price by 4 percent, the number of ice cream cones demanded falls to 46. Using the midpoint approach to calculate the price elasticity of demand, it follows that the
|
72. When the price of chai tea lattés is $5, Maxine buys 20 per month. When the price is $4, she buys 30 per month. Maxine’s demand for chai tea lattés is
|
Table 5-1
|
73. Refer to Table 5-1. Which of the following is consistent with the elasticities given in Table 5-1?
|
74. Refer to Table 5-1. Which of the following is consistent with the elasticities given in Table 5-1?
|
75. Refer to Table 5-1. Which of the following is consistent with the elasticities given in Table 5-1?
|
76. Suppose there is a 6 percent increase in the price of good X and a resulting 6 percent decrease in the quantity of X demanded. Price elasticity of demand for X is
|
77. If the price elasticity of demand for a good is 2.0, then a 10 percent increase in price results in a
|
78. If the price elasticity of demand for a good is 0.5, then a 5 percent increase in price results in a
|
79. If the price elasticity of demand for a good is 5, then a 10 percent increase in price results in a
|
80. If the price elasticity of demand for a good is 0.3, then a 20 percent decrease in price results in a
|
81. If the price elasticity of demand for a good is 1.2, then a 3 percent decrease in price results in a
|
82. If the price elasticity of demand for a good is 0.2, then a 3 percent decrease in price results in a
|
83. If the price elasticity of demand for a good is 1, then a 3 percent decrease in price results in a
|
84. If the price elasticity of demand for a good is 4, then a 12 percent decrease in price results in a
|
85. If the price elasticity of demand for a good is 0.4, then which of the following events is consistent with a 2 percent decrease in the quantity of the good demanded?
|
86. For a particular good, a 2 percent increase in price causes a 12 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
|
87. For a particular good, a 5 percent increase in price causes a 15 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
|
88. For a particular good, an 8 percent increase in price causes a 4 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
|
89. For a particular good, an 8 percent increase in price causes a 12 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
|
90. For a particular good, a 5 percent increase in price causes a 2 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
|
91. For a particular good, a 12 percent increase in price causes a 3 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
|
92. For a particular good, a 3 percent increase in price causes a 10 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
|
93. For a particular good, a 10 percent increase in price causes a 3 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
|
94. If a 15% increase in price for a good results in a 20% decrease in quantity demanded, the price elasticity of demand is
|
95. If a 20% increase in price for a good results in a 15% decrease in quantity demanded, the price elasticity of demand is
|
96. If a 10% decrease in price for a good results in a 20% increase in quantity demanded, the price elasticity of demand is
|
97. If a 6% decrease in price for a good results in a 2% increase in quantity demanded, the price elasticity of demand is
|
98. Suppose that quantity demand falls by 30% as a result of a 5% increase in price. The price elasticity of demand for this good is
|
99. Suppose that quantity demand rises by 10% as a result of a 15% decrease in price. The price elasticity of demand for this good is
|
100. If the price elasticity of demand for a good is 6, then a 3 percent decrease in price results in
|
101. If the price elasticity of demand for a good is 2, then a 10 percent decrease in the quantity demanded must be the result of
|
102. If the price elasticity of demand for a good is 0.8, then a 12 percent increase in the quantity demanded must be the result of
|
103. If the price elasticity of demand for a good is 1.4, then a 14 percent increase in the quantity demanded must be the result of
|
104. Studies indicate that the price elasticity of demand for cigarettes is about 0.4. A government policy aimed at reducing smoking changed the price of a pack of cigarettes from $2 to $6. According to the midpoint method, the government policy should have reduced smoking by
|
105. Studies indicate that the price elasticity of demand for beer is about 0.9. A government policy aimed at reducing beer consumption changed the price of a case of beer from $10 to $20. According to the midpoint method, the government policy should have reduced beer consumption by
|
Table 5-2
|
106. Refer to Table 5-2. Using the midpoint method, if the price falls from $200 to $150, the absolute value of the price elasticity of demand is
|
107. Refer to Table 5-2. Using the midpoint method, if the price falls from $150 to $100, the absolute value of the price elasticity of demand is
|
108. Refer to Table 5-2. Using the midpoint method, if the price falls from $100 to $50, the absolute value of the price elasticity of demand is
|
109. Refer to Table 5-2. Using the midpoint method, if the price falls from $200 to $150, the price elasticity of demand is
|
110. Refer to Table 5-2. Using the midpoint method, if the price falls from $100 to $50, the price elasticity of demand is
|
| Table 5-3
Consider the following demand schedule.
|
111. Refer to Table 5-3. Using the midpoint method, what is the price elasticity of demand between $0 and $3?
|
112. Refer to Table 5-3. Using the midpoint method, in which range is demand most elastic?
|
| Table 5-4 The following table shows the demand schedule for a particular good.
|
113. Refer to Table 5-4. Using the midpoint method, what is the price elasticity of demand when price rises from $12 to $16?
|
114. Refer to Table 5-4. Using the midpoint method, when price rises from $8 to $12, the price elasticity of demand is
|
115. Refer to Table 5-4. Using the midpoint method, when price falls from $8 to $4, the price elasticity of demand is
|
| Figure 5-1 |
116. Refer to Figure 5-1. Between point A and point B, price elasticity of demand is equal to
|
117. Refer to Figure 5-1. Between point A and point B, the slope is equal to
|
118. Refer to Figure 5-1. Between point A and point B on the graph, demand is
|
119. Elasticity of demand is closely related to the slope of the demand curve. The more responsive buyers are to a change in price, the
|
120. Elasticity of demand is closely related to the slope of the demand curve. The less responsive buyers are to a change in price, the
|
121. The flatter the demand curve through a given point, the
|
122. The smaller the price elasticity of demand, the
|
123. As we move downward and to the right along a linear, downward-sloping demand curve,
|
124. The difference between slope and elasticity is that slope
|
125. Suppose demand is perfectly elastic, and the supply of the good in question decreases. As a result,
|
126. A perfectly elastic demand implies that
|
127. The case of perfectly elastic demand is illustrated by a demand curve that is
|
128. When small changes in price lead to infinite changes in quantity demanded, demand is perfectly
|
129. For a horizontal demand curve,
|
130. Suppose demand is perfectly inelastic, and the supply of the good in question decreases. As a result,
|
131. In the case of perfectly inelastic demand,
|
132. When demand is perfectly inelastic, the demand curve will be
|
133. When demand is perfectly inelastic, the price elasticity of demand
|
134. A perfectly inelastic demand implies that buyers
|
135. Marcus says that he would smoke one pack of cigarettes each day regardless of the price. If he is telling the truth, Marcus’s
|
136. Jerome says that he will spend exactly $25 each month on new apps for his mobile device, regardless of the price of apps. Jerome’s demand for apps is
|
137. For a vertical demand curve,
|
138. In which of these instances is demand said to be perfectly inelastic?
|
139. Demand is said to have unit elasticity if the price elasticity of demand is
|
140. Demand is said to be unit elastic if quantity demanded
|
141. If the price elasticity of demand is 1.5, regardless of which two points on the demand curve are used to compute the elasticity, then demand is
|
142. When quantity moves proportionately the same amount as price, demand is
|
143. When we move upward and to the left along a linear, downward-sloping demand curve, price elasticity of demand
|
144. The price elasticity of demand changes as we move along a
|
| Figure 5-2 |
145. Refer to Figure 5-2. As price falls from Pa to Pb, which demand curve represents the most elastic demand?
|
146. Refer to Figure 5-2. As price falls from Pa to Pb, we could use the three demand curves to calculate three different values of the price elasticity of demand. Which of the three demand curves would produce the smallest elasticity?
|
| Figure 5-3 |
147. Refer to Figure 5-3. The demand curve representing the demand for a luxury good with several close substitutes is
|
148. Refer to Figure 5-3. Jenna says she would buy 10 gallons of gas per week regardless of the price. If this is true, then Jenna’s demand for gas is represented by demand curve
|
149. Refer to Figure 5-3. Which demand curve is perfectly elastic?
|
150. Refer to Figure 5-3. Which demand curve is perfectly inelastic?
|
151. Refer to Figure 5-3. Which demand curve is unit elastic?
|
152. An increase in price causes an increase in total revenue when demand is
|
153. Suppose that demand is inelastic within a certain price range. For that price range,
|
154. When demand is inelastic, the price elasticity of demand is
|
155. How does total revenue change as one moves downward and to the right along a linear demand curve?
|
156. On a downward-sloping linear demand curve, total revenue reaches its maximum value at the
|
157. When demand is inelastic, a decrease in price will cause
|
158. When demand is elastic, a decrease in price will cause
|
159. When demand is inelastic, an increase in price will cause
|
160. When demand is elastic, an increase in price will cause
|
161. If demand is price inelastic, then when price rises, total revenue
|
162. If a change in the price of a good results in no change in total revenue, then
|
163. When demand is unit elastic, price elasticity of demand equals
|
164. If the demand curve is linear and downward sloping, which of the following statements is not correct?
|
165. Total revenue
|
166. Moving downward and to the right along a linear demand curve, we know that total revenue
|
167. Total revenue will be at its largest value on a linear demand curve at the
|
168. In which of the following situations will total revenue increase?
|
169. Which of the following is not possible?
|
170. Which of the following could be the price elasticity of demand for a good for which a decrease in price would increase revenue?
|
171. Which of the following could be the price elasticity of demand for a good for which an increase in price would increase revenue?
|
172. Which of the following could be the price elasticity of demand for a good for which a decrease in price would decrease revenue?
|
173. Which of the following could be the price elasticity of demand for a good for which an increase in price would decrease revenue?
|
174. When the price of good A is $50, the quantity demanded of good A is 500 units. When the price of good A rises to $70, the quantity demanded of good A falls to 400 units. Using the midpoint method, the price elasticity of demand for good A is
|
175. The local bakery makes such great cinnamon rolls that consumers do not respond much at all to a change in the price. If the owner is only interested in increasing revenue, she should
|
176. Consider luxury weekend hotel packages in Las Vegas. When the price is $250, the quantity demanded is 2,000 packages per week. When the price is $280, the quantity demanded is 1,700 packages per week. Using the midpoint method, the price elasticity of demand is about
|
177. Skip’s Sealcoating Service increased its total monthly revenue from $12,000 to $13,500 when it raised the price of driveway repairs from $600 to $750. The price elasticity of demand for Skip’s Sealcoating Service is
|
178. Hilda’s Hair Hysteria earned $3,750 in total revenue last month when it sold 125 haircuts. This month it earned $3,600 in total revenue when it sold 90 haircuts. The price elasticity of demand for Hilda’s Hair Hysteria is
|
179. Suppose that when the price of wheat is $2 per bushel, farmers can sell 10 million bushels. When the price of wheat is $3 per bushel, farmers can sell 8 million bushels. Which of the following statements is true? The demand for wheat is
|
180. Suppose that when the price of ginger ale is $2 per bottle, firms can sell 4 million bottles. When the price of ginger ale is $3 per bottle, firms can sell 2 million bottles. Which of the following statements is true?
|
181. Suppose that 50 hot dogs are demanded at a particular price. If the price of hot dogs rises from that price by 5 percent, the number of hot dogs demanded falls to 48. Using the midpoint approach to calculate the price elasticity of demand, it follows that the
|
182. Suppose that 300 bottles of soda are demanded at a particular price. If the price of a bottle of soda rises from that price by 6 percent, the number of bottles of soda demanded falls to 275. Using the midpoint approach to calculate the price elasticity of demand, it follows that the
|
183. When a university bookstore prices chemistry textbooks at $200 each, it generally sells 120 books per month. If it lowers the price to $160, sales increase to 160 books per month. Given this information, we know that the price elasticity of demand for chemistry books is about
|
184. A city wants to raise revenues to build a new municipal swimming pool next year. The mayor suggests that the city raise the price of admission to the current municipal pools this year to raise revenues. The city manager suggests that the city lower the price of admission to raise revenues. Who is correct?
|
185. A city wants to raise revenues to build a new municipal swimming pool next year. The mayor suggests that the city raise the price of admission to the current municipal pools this year to raise revenues. The city manager suggests that the city lower the price of admission to raise revenues. Who is correct?
|
186. You have just been hired as a business consultant to determine what pricing policy would be appropriate to increase the total revenue of a bakery. The first step you would take would be to
|
187. You are in charge of the local city-owned aquatic center. You need to increase the revenue generated by the aquatic center to meet expenses. The mayor advises you to increase the price of a day pass. The city manager recommends reducing the price of a day pass. You realize that
|
188. Get Smart University is contemplating an increase in tuition to enhance revenue. If GSU feels that raising tuition would enhance revenue, it is
|
189. If the price elasticity of demand for apples is 0.8, then a 2.4% increase in the price of apples will decrease the quantity demanded of apples by
|
190. If the price elasticity of demand for aluminum foil is 1.45, then a 2.4% decrease in the price of aluminum foil will increase the quantity demanded of aluminum foil by
|
191. If the demand for donuts is elastic, then a decrease in the price of donuts will
|
192. If the demand for bananas is elastic, then an increase in the price of bananas will
|
193. If the demand for textbooks is inelastic, then a decrease in the price of textbooks will
|
194. If the demand for textbooks is inelastic, then an increase in the price of textbooks will
|
195. Josh mows lawns. If the demand for lawn-mowing service is elastic and Josh wants to increase his total revenue, he should
|
196. Holding all other forces constant, if increasing the price of a good leads to an increase in total revenue, then the demand for the good must be
|
197. Holding all other forces constant, if increasing the price of a good leads to a decrease in total revenue, then the demand for the good must be
|
198. Holding all other forces constant, if decreasing the price of a good leads to an increase in total revenue, then the demand for the good must be
|
199. Holding all other forces constant, if decreasing the price of a good leads to a decrease in total revenue, then the demand for the good must be
|
200. Suppose you are in charge of setting prices at a local ice cream shop. The business needs to increase its total revenue, and your job is on the line. You evaluate the data and determine that the price elasticity of demand for ice cream at your shop is 1.8. You should
|
201. Suppose an airline determines that its customers traveling for business have inelastic demand and its customers traveling for vacations have an elastic demand. If the airline’s objective is to increase total revenue, it should
|
202. Your younger sister needs $50 to buy a new bike. She has opened a lemonade stand to make the money she needs. Your mother is paying for all of the ingredients. She currently is charging 25 cents per cup, but she wants to adjust her price to earn the $50 faster. If you know that the demand for lemonade is elastic, what is your advice to her?
|
203. Suppose the point (Q = 3,400, P = $20) is the midpoint on a certain downward-sloping, linear demand curve. Then
|
204. Suppose a market has the demand function Qd=20-0.5P. At which of the following prices will total revenue be maximized?
|
205. Suppose a market has the demand function Qd=20-0.5P. Between which of the following price ranges is demand most inelastic?
|
Table 5-5
|
206. Refer to Table 5-5. As price rises from $5 to $6, the price elasticity of demand using the midpoint method is approximately
|
207. Refer to Table 5-5. As price rises from $7 to $8, the price elasticity of demand using the midpoint method is approximately
|
208. Refer to Table 5-5. Demand is unit elastic when quantity demanded changes from
|
209. Refer to Table 5-5. When price is between $5 and $9, demand is
|
Table 5-6
|
210. Refer to Table 5-6. As price rises from $10 to $15, the price elasticity of demand using the midpoint method is approximately
|
211. Refer to Table 5-6. Using the midpoint method, demand is unit elastic when quantity demanded changes from
|
| Figure 5-4 |
212. Refer to Figure 5-4. Suppose the point labeled B is the “halfway point” on the demand curve and it corresponds to a price of $5.00. Then, between prices of $4.99 and $5.01, the price elasticity of demand is
|
213. Refer to Figure 5-4. The section of the demand curve from A to B represents the
|
214. Refer to Figure 5-4. The section of the demand curve from B to C represents the
|
215. Refer to Figure 5-4. The section of the demand curve at point B represents the
|
216. Refer to Figure 5-4. Assume the section of the demand curve from A to B corresponds to prices between $8 and $16. Then, when the price changes between $9 and $10,
|
217. Refer to Figure 5-4. Assume the section of the demand curve from A to B corresponds to prices between $6 and $12. Then, when the price increases from $8 to $10,
|
218. Refer to Figure 5-4. Assume, for the good in question, two specific points on the demand curve are (Q = 1,000, P = $40) and (Q = 1,500, P = $30). Then which of the following scenarios is possible?
|
219. Refer to Figure 5-4. The section of the demand curve from B to C represents the
|
220. Refer to Figure 5-4. Assume the section of the demand curve from B to C corresponds to prices between $0 and $15. Then, when the price changes between $7 and $9,
|
221. Refer to Figure 5-4. Assume, for the good in question, two specific points on the demand curve are (Q = 2,000, P = $15) and (Q = 2,400, P = $12). Then which of the following scenarios is possible?
|
222. Refer to Figure 5-4. If the price decreases in the region of the demand curve between points A and B, we can expect total revenue to
|
223. Refer to Figure 5-4. If the price increases in the region of the demand curve between points A and B, we can expect total revenue to
|
224. Refer to Figure 5-4. If the price decreases in the region of the demand curve between points B and C, we can expect total revenue to
|
225. Refer to Figure 5-4. If the price increases in the region of the demand curve between points B and C, we can expect total revenue to
|
| Figure 5-5 |
226. Refer to Figure 5-5. Using the midpoint method, demand is unit elastic between prices of
|
227. Refer to Figure 5-5. Using the midpoint method, between prices of $20 and $30, price elasticity of demand is about
|
228. Refer to Figure 5-5. Using the midpoint method, between prices of $70 and $80, price elasticity of demand is
|
229. Refer to Figure 5-5. Using the midpoint method, between prices of $50 and $60, price elasticity of demand is about
|
230. Refer to Figure 5-5. The maximum value of total revenue corresponds to a price of
|
231. Refer to Figure 5-5. At a price of $70 per unit, sellers’ total revenue equals
|
232. Refer to Figure 5-5. At a price of $10 per unit, sellers’ total revenue equals
|
233. Refer to Figure 5-5. At a price of $50 per unit, sellers’ total revenue equals
|
| Figure 5-6 |
234. Refer to Figure 5-6. For prices above $8, demand is price
|
235. Refer to Figure 5-6. For prices below $8, demand is price
|
| Figure 5-7 |
236. Refer to Figure 5-7. For prices above $5, demand is price
|
237. Refer to Figure 5-7. For prices below $5, demand is price
|
| Figure 5-8 |
238. Refer to Figure 5-8. When the price is $15, total revenue is
|
239. Refer to Figure 5-8. When price falls from $25 to $20, demand is
|
240. Refer to Figure 5-8. An increase in price from $10 to $15 would
|
241. Refer to Figure 5-8. An increase in price from $15 to $20 would
|
| Figure 5-9 |
242. Refer to Figure 5-9. Using the midpoint method, the price elasticity of demand between point A and point B is
|
243. Refer to Figure 5-9. Using the midpoint method, the price elasticity of demand between point C and point D is about
|
244. Refer to Figure 5-9. If the price falls from point A to point B, total revenue
|
245. Refer to Figure 5-9. If the price rises from point D to point C, total revenue
|
| Figure 5-10 |
246. Refer to Figure 5-10. If rectangle D is larger than rectangle A, then
|
247. Refer to Figure 5-10. Total revenue when the price is P1 is represented by the area(s)
|
248. Refer to Figure 5-10. Total revenue when the price is P2 is represented by the area(s)
|
| Figure 5-11 |
249. Refer to Figure 5-11. Suppose this demand curve is a straight, downward-sloping line all the way from the horizontal intercept to the vertical intercept. We choose two prices, P1 and P2, and the corresponding quantities demanded, Q1 and Q2, for the purpose of calculating the price elasticity of demand. Also suppose P2 > P1. In which of the following cases could we possibly find that (i) demand is elastic and (ii) a decrease in price from P1 to P2 causes an decrease in total revenue?
|
250. Refer to Figure 5-11. If price increases from $10 to $20, total revenue will
|
251. Refer to Figure 5-11. A decrease in price from $20 to $10 leads to a
|
| Figure 5-12 |
252. Refer to Figure 5-12. Using the midpoint method, the price elasticity of demand between point X and point Y is
|
253. Refer to Figure 5-12. Using the midpoint method, the price elasticity of demand between point Y and point Z is
|
254. Refer to Figure 5-12. If the price decreased from $36 to $12, total revenue would
|
255. Refer to Figure 5-12. Sellers’ total revenue would increase if the price
|
256. Refer to Figure 5-12. Which of the following price changes would result in no change in sellers’ total revenue?
|
257. Refer to Figure 5-12. Sellers’ total revenue would increase if the price
|
| Figure 5-13 |
258. Refer to Figure 5-13. Between point A and point B, price elasticity of demand using the midpoint method is equal to
|
259. Refer to Figure 5-13. Between point A and point B on the graph, demand is
|
260. Income elasticity of demand measures how
|
261. To determine whether a good is considered normal or inferior, one could examine the value of the
|
262. Suppose good X has a positive income elasticity of demand. This implies that good X could be
|
263. Suppose good X has a negative income elasticity of demand. This implies that good X is
|
264. If an increase in income results in a decrease in the quantity demanded of a good, then for that good, the
|
265. Which of the following should be held constant when calculating an income elasticity of demand?
|
266. Which of the following should be held constant when calculating an income elasticity of demand?
|
267. Necessities such as food and clothing tend to have
|
268. For which of the following goods is the income elasticity of demand likely highest?
|
269. For which of the following goods is the income elasticity of demand likely highest?
|
270. For which of the following goods is the income elasticity of demand likely lowest?
|
271. For which of the following goods is the income elasticity of demand likely lowest?
|
272. For which of the following types of goods would the income elasticity of demand be positive and relatively large?
|
273. The income elasticity of demand for caviar tends to be
|
| Table 5-7 The following table shows a portion of the demand schedule for a particular good at various levels of income.
|
274. Refer to Table 5-7. Using the midpoint method, when income equals $7,500, what is the price elasticity of demand between $16 and $20?
|
275. Refer to Table 5-7. Using the midpoint method, when income equals $5,000, what is the price elasticity of demand between $8 and $12?
|
276. Refer to Table 5-7. Using the midpoint method, at a price of $16, what is the income elasticity of demand when income rises from $5,000 to $10,000?
|
277. Refer to Table 5-7. Using the midpoint method, at a price of $8, what is the income elasticity of demand when income rises from $7,500 to $10,000?
|
278. Refer to Table 5-7. Using the midpoint method, at a price of $12, what is the income elasticity of demand when income rises from $5,000 to $10,000?
|
Table 5-8
|
279. Refer to Table 5-8. Using the midpoint method, what is the income elasticity of demand for good X?
|
280. Refer to Table 5-8. Using the midpoint method, the income elasticity of demand for good Y is
|
281. Suppose the income elasticity of demand is -0.5 for good X. This implies that a 5% decrease in income will cause the quantity demanded of good X to
|
282. Last year, Max bought 6 pairs of athletic shoes when his income was $35,000. This year, his income is $42,000, and he purchased 8 pairs of athletic shoes. Holding other factors constant, it follows that Max
|
283. Last year, Tess bought 5 handbags when her income was $54,000. This year, her income is $60,000, and she purchased 7 handbags. Holding other factors constant, it follows that Tess’s income elasticity of demand is about
|
284. Last year, Jim bought 8 tickets to sporting events when his income was $30,000. This year, his income is $33,000, and he purchased 10 tickets to sporting events. Holding other factors constant and using the midpoint method, it follows that Jim’s income elasticity of demand is about
|
285. Danita rescues dogs from her local animal shelter. When Danita’s income rises by 7 percent, her quantity demanded of dog biscuits increases by 12 percent. For Danita, the income elasticity of demand for dog biscuits is
|
286. Last year, Joan bought 50 pounds of hamburger when her household’s income was $40,000. This year, her household income was only $30,000 and Joan bought 60 pounds of hamburger. All else constant, Joan’s income elasticity of demand for hamburger is
|
287. You and your college roommate eat three packages of Ramen noodles each week. After graduation last month, both of you were hired at several times your college income. You still enjoy Ramen noodles very much and buy even more, but your roommate plans to buy fewer Ramen noodles in favor of foods she prefers more. When looking at income elasticity of demand for Ramen noodles, yours would
|
288. You and your college roommate eat three packages of Ramen noodles each week. After graduation last month, both of you were hired at several times your college income. Your roommate still enjoys Ramen noodles very much and buys even more, but you plan to buy fewer Ramen noodles in favor of foods you prefer more. When looking at income elasticity of demand for Ramen noodles, yours would
|
289. While in college, John and Bethany each buy five packages of mac-n-cheese per week. After they graduate and have full-time jobs, John buys six packages per week, but Bethany buys only two packages per week. When looking at income elasticity of demand for mac-n-cheese, John’s
|
290. While in college, Marty and Laura each buy 15 bus tickets per month. After they graduate and have full-time jobs, Marty buys 0 bus tickets per month and Laura buys 28 bus tickets per month. Comparing income elasticity of demand for bus tickets, Marty’s
|
291. Assume that a 4 percent increase in income results in a 2 percent increase in the quantity demanded of a good. The income elasticity of demand for the good is
|
292. Assume that a 4 percent decrease in income results in a 6 percent increase in the quantity demanded of a good. The income elasticity of demand for the good is
|
293. Heath’s income elasticity of demand for concerts is 2. All else equal, this means that if his income increases by 10 percent, he will purchase tickets for
|
294. When her income increased from $10,000 to $20,000, Heather’s consumption of macaroni decreased from 10 pounds to 5 pounds and her consumption of soy-burgers increased from 2 pounds to 4 pounds. We can conclude that for Heather, macaroni
|
295. Food and clothing tend to have
|
296. Charles purchases 20 basketball tickets per year when his annual income is $50,000 and 25 basketball tickets when his annual income is $60,000. Charles’s income elasticity of demand for basketball ticket is
|
297. Tyler purchases 5 pounds of hot dogs per month when his monthly income is $2,000 and 4 pounds of hot dogs per month when his monthly income is $2,200. Tyler’s income elasticity of demand for hot dogs is
|
298. Cross-price elasticity of demand measures how
|
299. The cross-price elasticity of demand can tell us whether goods are
|
300. Which of the following expressions represents a cross-price elasticity of demand?
|
301. If the cross-price elasticity of two goods is negative, then the two goods are
|
302. If the cross-price elasticity of two goods is positive, then the two goods are
|
303. If two goods are substitutes, their cross-price elasticity will be
|
304. If two goods are complements, their cross-price elasticity will be
|
305. Suppose goods A and B are substitutes for each other. We would expect the cross-price elasticity between these two goods to be
|
306. Which of the following could be the cross-price elasticity of demand for two goods that are complements?
|
307. For which pairs of goods is the cross-price elasticity most likely to be positive?
|
308. For which pairs of goods is the cross-price elasticity most likely to be negative?
|
309. If the cross-price elasticity of demand for two goods is 1.25, then
|
310. If the cross-price elasticity of demand for two goods is -4.5, then
|
311. Suppose that when the price of good X increases from $800 to $850, the quantity demanded of good Y increases from 65 to 70. Using the midpoint method, the cross price elasticity of demand is about
|
312. Last month, sellers of good Y took in $100 in total revenue on sales of 50 units of good Y. This month sellers of good Y raised their price and took in $120 in total revenue on sales of 40 units of good Y. At the same time, the price of good X stayed the same, but sales of good X increased from 20 units to 40 units. We can conclude that goods X and Y are
|
313. Suppose that when the price of good X falls from $10 to $8, the quantity demanded of good Y rises from 20 units to 25 units. Using the midpoint method, the cross-price elasticity of demand is
|
314. Suppose that when the price of good X falls from $6 to $4, the quantity demanded of good Y rises from 30 units to 40 units. Using the midpoint method, the cross-price elasticity of demand is
|
315. Suppose the cross-price elasticity of demand between hot dogs and mustard is -2.00. This implies that a 20 percent increase in the price of hot dogs will cause the quantity of mustard purchased to
|
316. Suppose the cross-price elasticity of demand between peanut butter and jelly is -2.50. This implies that a 20 percent increase in the price of peanut butter will cause the quantity of jelly purchased to
|
317. Maddy purchases 2 pounds of beans and 3 pounds of rice per month when the price of beans is $2 per pound. She purchases 1 pounds of beans and 4 pounds of rice per month when the price of beans is $3 per pound. Maddy’s cross-price elasticity of demand for beans and rice is
|
| Scenario 5-1 Suppose that when the average college student’s income is $10,000 per year, the annual quantity demanded of Patty’s Pizza is 50 and the annual quantity demanded of Sue’s Subs is 80. Suppose that when the price of Patty’s Pizza increases from $8 to $10 per pie, the quantity demanded of Sue’s Subs increases from 80 to 100. Suppose also that when the average student’s income increases to $12,000 per year, the annual quantity demanded of Patty’s Pizza increases from 50 to 60. |
318. Refer to Scenario 5-1. What can you deduce about the type of good Patty’s Pizza is and about the relationship between Patty’s Pizza and Sue’s Subs?
|
319. Refer to Scenario 5-1. Using the midpoint method, what is the income elasticity of demand for pizza and what does the value indicate about the demand for pizza?
|
320. Refer to Scenario 5-1. Using the midpoint method, the cross price elasticity of demand is
|
| Scenario 5-2 Suppose the demand function for good X is given by: where is the quantity demanded of good X, is the price of good X, and is the price of good Y, which is related to good X. |
321. Refer to Scenario 5-2. Using the midpoint method, if the price of good X is constant at $10 and the price of good Y decreases from $10 to $8, the cross price elasticity of demand is about
|
322. The price elasticity of demand for bread is
|
323. The demand for a good becomes more inelastic
|
324. Which of the following statements is correct?
|
325. Which of the following is likely to have the most price elastic demand?
|
326. Which of the following is likely to have the most price elastic demand?
|
327. Which of the following is likely to have the most price elastic demand?
|
328. Suppose the price of apples decreases from $1.00 to $0.80 each and, as a result, the quantity of apples demanded increases from 800 to 1,000. Using the midpoint method, the price elasticity of demand for apples in the given price range is
|
329. You have just been hired as a business consultant to determine what pricing policy would be appropriate to increase the total revenue of a therapeutic massage spa. The first step you would take would be to
|
330. For which of the following goods is the income elasticity of demand likely highest?
|
331. For which pairs of goods is the cross-price elasticity most likely to be positive?
|
332. For which pairs of goods is the cross-price elasticity most likely to be negative?
|
1. A decrease in supply will cause the largest increase in price when
|
2. A decrease in supply will cause the smallest increase in price when
|
3. The discovery of a new hybrid wheat would increase the supply of wheat. As a result, wheat farmers would realize an increase in total revenue if the
|
4. Because the demand for wheat tends to be inelastic, the development of a new, more productive hybrid wheat would tend to
|
5. Knowing that the demand for wheat is inelastic, if all farmers voluntarily did not plant wheat on 10 percent of their land, then
|
6. Suppose researchers at the University of Wisconsin discover a new vitamin that increases the milk production of dairy cows. If the demand for milk is relatively inelastic, the discovery will
|
7. Suppose that corn farmers want to increase their total revenue. Knowing that the demand for corn is inelastic, corn farmers should
|
8. Good news for farming can be bad news for farmers because the
|
9. If soybean farmers know that the demand for soybeans is inelastic, in order to increase their total revenues they should
|
10. Farm programs that pay farmers not to plant crops on all their land
|
11. There are fewer farmers in the United States today than 200 years ago because of
|
12. How did the farm population in the United States change between 1950 and today?
|
13. Between 1950 and today there was a
|
14. An advance in farm technology that results in an increased market supply is
|
15. A recent news report lamented the plight of corn farmers in Wisconsin due to a severe drought. Which of the following best describes the effect on corn farmers in Minnesota, where sufficient rainfall occurred?
|
| Scenario 5-3 The supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tax increase decreases the demand for both goods by 10%. |
16. Refer to Scenario 5-3. The equilibrium price will
|
17. Refer to Scenario 5-3. The equilibrium quantity will
|
18. Refer to Scenario 5-3. The change in equilibrium price will be
|
19. Refer to Scenario 5-3. The change in equilibrium quantity will be
|
20. Refer to Scenario 5-3. Total consumer spending on aged cheddar cheese will
|
| Scenario 5-4 Milk has an inelastic demand, and beef has an elastic demand. Suppose that a mysterious increase in bovine infertility decreases both the population of dairy cows and the population of beef cattle by 50 percent. |
21. Refer to Scenario 5-4. The equilibrium price will
|
22. Refer to Scenario 5-4. The equilibrium quantity will
|
23. Refer to Scenario 5-4. The change in equilibrium price will be
|
24. Refer to Scenario 5-4. The change in equilibrium quantity will be
|
25. Refer to Scenario 5-4. Total consumer spending on milk will
|
| Scenario 5-5 Suppose the government is concerned about firms in the United States importing illegal caviar. As a result, the government increases border patrols to catch illegal shipments. U.S. Customs agents perform DNA testing on the caviar to determine if it comes from endangered species of fish. If so, the government destroys the caviar. |
26. Refer to Scenario 5-5. What would we expect to observe in the caviar market?
|
Table 5-11
|
27. Refer to Table 5-11. Which scenario describes the market for oil in the short run in comparison to the long run?
|
28. Refer to Table 5-11. Which scenario describes the market for oil in the short run?
|
29. Refer to Table 5-11. Which scenario describes the market for oil in the long run?
|
30. In the market for oil in the short run, demand
|
31. The supply of oil is likely to be
|
32. In the early 1970s, OPEC’s goal was to
|
33. Which of the following was not a reason OPEC failed to keep the price of oil high?
|
34. OPEC successfully raised the world price of oil in the 1970s and early 1980s, primarily due to
|
35. Why was OPEC unable to maintain high oil prices in the long run?
|
36. If marijuana were legalized, it is likely that there would be an increase in the supply of marijuana. Advocates of marijuana legalization argue that this would significantly reduce the amount of revenue going to the criminal organizations that currently supply marijuana. These advocates believe that the
|
37. Under which of the following conditions would the interdiction of illegal drugs result in a decrease in the quantity of drugs sold and in a decrease in total spending on illegal drugs by drug users?
|
38. Which of the following statements does not help to explain why government drug interdiction increases drug-related crime?
|
39. Which of the following statements helps to explain why government drug interdiction increases drug-related crime?
|
40. Which of the following statements is not correct concerning government attempts to reduce the flow of illegal drugs into the country? Drug interdiction
|
41. Given the market for illegal drugs, when the government is successful in reducing the flow of drugs into the United States,
|
42. A drug interdiction program that successfully reduces the supply of illegal drugs in the United States likely will
|
43. The federal government is concerned about obesity in the United States. Congress is considering two plans. One will ban the production and sale of “junk food.” The other will increase nutrition-education programs and include substantial advertising campaigns to encourage healthy eating habits. The junk-food ban program
|
44. The federal government is concerned about the negative effects of cigarette smoking in the United States. Suppose Congress is considering two plans. One plan would limit the production of cigarettes. The other would require manufacturers to include graphic photos on cigarette packages of people suffering cancer’s effects. Which of the following statements is true?
|
45. The production of methamphetamine (meth) is a social problem in the Midwest. Iowa is considering two potential programs: Operation Methbust would increase the number of sheriffs’ deputies to search out and destroy methamphetamine labs. Operation Say No to Meth would increase the training required of public school teachers so that they could better educate students about the health risks of using meth. Assuming that each program were successful, which of the following statements is correct?
|
46. The production of methamphetamine (meth) is a social problem in the Midwest. Iowa is considering two potential programs: Operation Methbust would increase the number of sheriffs’ deputies to search out and destroy methamphetamine labs. Operation Say No to Meth would increase the training required of public school teachers so that they could better educate students about the health risks of using meth. Assuming that each program were successful, which of the following statements is correct?
|
47. If marijuana were legalized, it is likely that there would be an increase in the demand for marijuana. If demand for marijuana is inelastic and the supply of marijuana is perfectly elastic, this will result in
|
48. Which of the following statements about agriculture in the U.S. is correct?
|
49. Which of the following statements about agriculture in the U.S. is correct?
|
50. Which of the following statements about agriculture in the U.S. is not correct?
|
51. OPEC has coordinated a reduction in supply that was
|
52. Which of the following statements is correct?
|
53. Drug-interdiction policies that reduce the supply of illegal drugs may
|
54. Drug-interdiction policies that reduce the supply of illegal drugs
|
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
