Question 1

Table 5-5 
-Refer to Table 5-5. As price rises from $5 to $6, the price elasticity of demand using the midpoint method is approximately

Accepted Answer

A)   0.07.
B)   0.18.
C)   0.41.
D)   2.45.E) All of the above
F) B) and C)

Question 2

Figure 5-10 
-Refer to Figure 5-10. Total revenue when the price is P2 is represented by the area(s)

Accepted Answer

A)   B + D.
B)   A + B.
C)   C + D.
D)   D.E) B) and D)
F) None of the above

Question 3

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

Accepted Answer

A)   supply for marijuana is elastic.
B)   demand for marijuana is elastic.
C)   supply for marijuana is inelastic.
D)   demand for marijuana is inelastic.E) C) and D)
F) B) and D)

Question 4

Table 5-2 
-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

Accepted Answer

A)   5.3.
B)   2.8.
C)   0.8.
D)   0.36.E) None of the above
F) B) and C)

Question 5

Figure 5-4 
-Refer to Figure 5-4. The section of the demand curve from B to C represents the

Accepted Answer

A)   elastic section of the demand curve.
B)   inelastic section of the demand curve.
C)   unit elastic section of the demand curve.
D)   perfectly elastic section of the demand curve.E) B) and D)
F) A) and D)

Question 6

Figure 5-20 
-Refer to Figure 5-20. Which supply curve represents perfectly inelastic supply?

Accepted Answer

A)   S1
B)   S2
C)   S3
D)   None of the supply curves is perfectly inelastic.E) A) and B)
F) A) and C)

Question 7

The demand for grape-flavored Hubba Bubba bubble gum is likely

Accepted Answer

A)   inelastic because there are many close substitutes for grape-flavored Hubba Bubba .
B)   elastic because there are many close substitutes for grape-flavored Hubba Bubba.
C)   inelastic because the market is broadly defined.
D)   elastic because the market is broadly defined.E) A) and C)
F) C) and D)

Question 8

How did the farm population in the United States change between 1950 and today?

Accepted Answer

A)   It dropped from 10 million to fewer than 3 million people.
B)   It dropped from 20 million to fewer than 5 million people.
C)   It dropped from 30 million to just over 6 million people.
D)   It increased from 10 million to almost 13 million people.E) A) and D)
F) B) and C)

Question 9

If the income elasticity of demand for a good is negative, then the good must be an inferior good.

Accepted Answer

A) True 
 B)False

Question 10

Figure 5-4 
-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,

Accepted Answer

A)   quantity demanded changes proportionately less than the price.
B)   quantity demanded changes proportionately more than the price.
C)   quantity demanded changes the same amount proportionately as price.
D)   the price elasticity of demand equals 1.E) C) and D)
F) None of the above

Question 11

Which of the following is likely to have the most price elastic demand?

Accepted Answer

A)   dental floss
B)   milk
C)   salt
D)   diamond earringsE) None of the above
F) A) and B)

Question 12

Good news for farming can be bad news for farmers because the

Accepted Answer

A)   supply curve for an individual farmer is usually perfectly elastic.
B)   supply curve for an individual farmer is usually perfectly inelastic.
C)   demand for basic foodstuffs is usually inelastic, meaning that factors that shift supply to the right decrease total revenues to sellers.
D)   demand for basic foodstuffs is usually elastic, meaning that factors that shift supply to the right increase total revenues to sellers.E) A) and C)
F) A) and B)

Question 13

If a 10% decrease in price for a good results in a 20% increase in quantity demanded, the price elasticity of demand is

Accepted Answer

A)   0.50.
B)   1.
C)   1.5.
D)   2.E) None of the above
F) A) and C)

Question 14

What is the price elasticity of demand at any point on a perfectly elastic demand curve?

Accepted Answer

The price ...

Question 15

The demand for bread is likely to be more elastic than the demand for solid-gold bread plates.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is likely to have the most price elastic demand?

Accepted Answer

A)   lattés
B)   doctor's visits
C)   eggs
D)   natural gasE) None of the above
F) A) and B)

Question 17

There are fewer farmers in the United States today than 200 years ago because of

Accepted Answer

A)   improvements in farm technology.
B)   increased government regulations in farming.
C)   an elastic demand for food.
D)   environmental programs designed to reduce soil erosion.E) B) and D)
F) A) and C)

Question 18

Which of the following could be the price elasticity of demand for a good for which an increase in price would increase revenue?

Accepted Answer

A)   0.3
B)   1
C)   1.8
D)   None of the above could be correct.E) A) and B)
F) B) and C)

Question 19

To determine whether a good is considered normal or inferior, one could examine the value of the

Accepted Answer

A)   income elasticity of demand for that good.
B)   price elasticity of demand for that good.
C)   price elasticity of supply for that good.
D)   cross-price elasticity of demand for that good.E) All of the above
F) None of the above

Question 20

The cross-price elasticity of demand can tell us whether goods are

Accepted Answer

A)   normal or inferior.
B)   elastic or inelastic.
C)   luxuries or necessities.
D)   complements or substitutes.E) A) and B)
F) None of the above

Exam 5: Elasticity and Its Application

Figure 5-20 -Refer to Figure 5-20. Which supply curve represents perfectly inelastic supply?

Correct Answer
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How did the farm population in the United States change between 1950 and today?

Correct Answer
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The demand for grape-flavored Hubba Bubba bubble gum is likely

Correct Answer
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Table 5-2 -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

Correct Answer
verified

Figure 5-4 -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,

Correct Answer
verified

The cross-price elasticity of demand can tell us whether goods are

Correct Answer
verified

Figure 5-10 -Refer to Figure 5-10. Total revenue when the price is P2 is represented by the area(s)

Correct Answer
verified

Good news for farming can be bad news for farmers because the

Correct Answer
verified

Which of the following is likely to have the most price elastic demand?

Correct Answer
verified

What is the price elasticity of demand at any point on a perfectly elastic demand curve?

Correct Answer
verified
The price ...
View Answer

The demand for bread is likely to be more elastic than the demand for solid-gold bread plates.

Correct Answer
verified

If a 10% decrease in price for a good results in a 20% increase in quantity demanded, the price elasticity of demand is

Correct Answer
verified

Table 5-5 -Refer to Table 5-5. As price rises from $5 to $6, the price elasticity of demand using the midpoint method is approximately

Correct Answer
verified

Figure 5-4 -Refer to Figure 5-4. The section of the demand curve from B to C represents the

Correct Answer
verified

Which of the following is likely to have the most price elastic demand?

Correct Answer
verified

If the income elasticity of demand for a good is negative, then the good must be an inferior good.

Correct Answer
verified

Which of the following could be the price elasticity of demand for a good for which an increase in price would increase revenue?

Correct Answer
verified

To determine whether a good is considered normal or inferior, one could examine the value of the

Correct Answer
verified

Correct Answer
verified

There are fewer farmers in the United States today than 200 years ago because of

Correct Answer
verified

Exam 5: Elasticity and Its Application

Figure 5-20 -Refer to Figure 5-20. Which supply curve represents perfectly inelastic supply?

Correct AnswerverifiedShow Answer

How did the farm population in the United States change between 1950 and today?

Correct AnswerverifiedShow Answer

The demand for grape-flavored Hubba Bubba bubble gum is likely

Correct AnswerverifiedShow Answer

Table 5-2 -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

Correct AnswerverifiedShow Answer

Figure 5-4 -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,

Correct AnswerverifiedShow Answer

The cross-price elasticity of demand can tell us whether goods are

Correct AnswerverifiedShow Answer

Figure 5-10 -Refer to Figure 5-10. Total revenue when the price is P2 is represented by the area(s)

Correct AnswerverifiedShow Answer

Good news for farming can be bad news for farmers because the

Correct AnswerverifiedShow Answer

Which of the following is likely to have the most price elastic demand?

Correct AnswerverifiedShow Answer

What is the price elasticity of demand at any point on a perfectly elastic demand curve?

Correct AnswerverifiedThe price ...View AnswerShow Answer

The demand for bread is likely to be more elastic than the demand for solid-gold bread plates.

Correct AnswerverifiedShow Answer

If a 10% decrease in price for a good results in a 20% increase in quantity demanded, the price elasticity of demand is

Correct AnswerverifiedShow Answer

Table 5-5 -Refer to Table 5-5. As price rises from $5 to $6, the price elasticity of demand using the midpoint method is approximately

Correct AnswerverifiedShow Answer

Figure 5-4 -Refer to Figure 5-4. The section of the demand curve from B to C represents the

Correct AnswerverifiedShow Answer

Which of the following is likely to have the most price elastic demand?

Correct AnswerverifiedShow Answer

If the income elasticity of demand for a good is negative, then the good must be an inferior good.

Correct AnswerverifiedShow Answer

Which of the following could be the price elasticity of demand for a good for which an increase in price would increase revenue?

Correct AnswerverifiedShow Answer

To determine whether a good is considered normal or inferior, one could examine the value of the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

There are fewer farmers in the United States today than 200 years ago because of

Correct AnswerverifiedShow Answer

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The price ...
View Answer

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