Question 1

The makers of academic books find that, when they raise the price of the average book from $50 to $75, quantity demanded among students drops from 100 to 90. Among casual readers, quantity demanded drops from 80 to 40.
a. Calculate the price elasticity of demand for each group.
b. Is demand price elastic or price inelastic for each group?
c. Using the determinants of demand, explain why there is a difference in elasticity for each group.

Accepted Answer

a. Students:= percentage change in quant...

Question 2

Price elasticity of demand measures the change in:

Accepted Answer

A)   quantity demanded due to the change in price.
B)   demand due to the change in price.
C)   quantity demanded due to the change in price of another good/service.
D)   price due to a change in quantity demanded.
E)   price due to the change in demand.F) A) and D)
G) A) and C)

Question 3

Cross-price elasticity measures the relationship between:

Accepted Answer

A)   normal goods and inferior goods.
B)   complements and inferior goods.
C)   necessities and luxuries.
D)   two goods and services.
E)   income and substitute goods.F) B) and E)
G) None of the above

Question 4

When the price of scooters drops by 5%, the quantity demanded changes by 20%. You know that the price elasticity of demand for scooters is:

Accepted Answer

A)   perfectly inelastic.
B)   inelastic.
C)   unitary elastic.
D)   elastic.
E)   perfectly elastic.F) D) and E)
G) A) and C)

Question 5

At a price of $2, the quantity demanded for pens is 12. When the price increases to $3, the quantity demanded for pens is 10. The price elasticity of demand for pens is:

Accepted Answer

A)   perfectly inelastic.
B)   inelastic.
C)   horizontal.
D)   elastic.
E)   perfectly elastic.F) None of the above
G) C) and D)

Question 6

Refer to the information in the accompanying table. Without any calculations, you know that sushi is a(n) :   Price(per  roll)   Quantity  Demanded  (income $10,000/ year)   Quantity  Demanded  (income= $30,000/ year)  $159$248$337$426$515\begin{array} { | l | c | c | } \hline \begin{array} { l } 	ext { Price(per } \	ext { roll)  }\end{array} & \begin{array} { l } 	ext { Quantity } \	ext { Demanded } \	ext { (income } \\$ 10,000 / 	ext { year)  }\end{array} & \begin{array} { l } 	ext { Quantity } \	ext { Demanded } \	ext { (income= } \\$ 30,000 / 	ext { year)  }\end{array} \\hline \$ 1 & 5 & 9 \\hline \$ 2 & 4 & 8 \\hline \$ 3 & 3 & 7 \\hline \$ 4 & 2 & 6 \\hline \$ 5 & 1 & 5 \\hline\end{array} Price(per  roll)  ​$1$2$3$4$5​ Quantity  Demanded  (income $10,000/ year)  ​54321​ Quantity  Demanded  (income= $30,000/ year)  ​98765​​

Accepted Answer

A)   necessity.
B)   substitute for fish sticks.
C)   normal good.
D)   inferior good.
E)   complement to sake. F) None of the above
G) A) and D)

Question 7

If a business finds that demand for its good is very price elastic, it knows that:

Accepted Answer

A)   price is very important.
B)   price is unimportant.
C)   price is unrelated.
D)   the effect of price is less important than the impact of the quantity consumers buy.
E)   the quantity consumers buy is unimportant.F) B) and D)
G) A) and B)

Question 8

Assume that the market for pencils is in equilibrium and that demand is very price elastic. The popularity of digital tablets and electronic pens increases and demand for pencils declines. The equilibrium change in quantity demanded is:

Accepted Answer

A)   0 (zero) .
B)   relatively small.
C)   proportional to the shift in demand.
D)   relatively large.
E)   infinite.F) B) and C)
G) C) and D)

Question 9

Refer to the following graphs to answer the  questions.
Graph A
Graph B
Graph C
Graph D
Graph E
-Which of these graphs most likely depicts a price elasticity of demand of -5?

Accepted Answer

A)   Graph A
B)   Graph B
C)   Graph C
D)   Graph D
E)   Graph EF) B) and C)
G) All of the above

Question 10

As you move right along a demand curve, the price elasticity of demand:

Accepted Answer

A)   becomes more inelastic.
B)   becomes more elastic.
C)   does not change.
D)   becomes infinite.
E)   moves closer to zero.F) A) and D)
G) A) and C)

Question 11

If the price elasticity of supply is 1.5, we know that supply is:

Accepted Answer

A)   relatively elastic.
B)   relatively inelastic.
C)   perfectly inelastic.
D)   unitary elastic.
E)   perfectly elastic.F) A) and D)
G) D) and E)

Question 12

There was a more than proportional decrease in quantity demanded for cupcakes when the local baker raised the price by 20%. The price elasticity of demand for cupcakes is:

Accepted Answer

A)   inelastic.
B)   elastic.
C)   perfectly inelastic.
D)   perfectly elastic.
E)   unitary elastic.F) B) and C)
G) C) and E)

Question 13

Graph and explain the appropriate shape of the supply or demand curve for Jimmy's Jammin Jelly Beans when:
a. there is a hurricane that destroys most sugarcane fields.
b. a new candy vendor opens a shop in town.
c. Jimmy's Jammin Jelly Beans become the hottest item to have at parties.

Accepted Answer

a.
Sugar, a key input into jelly beans, ...

Question 14

As you move left along the demand curve, the price elasticity of demand:

Accepted Answer

A)   becomes more inelastic.
B)   becomes more elastic.
C)   does not change.
D)   becomes infinite.
E)   moves closer to zero.F) B) and D)
G) A) and E)

Question 15

If the cross-price elasticity of demand is -5, Good A and Good B are:

Accepted Answer

A)   inferior goods.
B)   complements.
C)   substitutes.
D)   normal goods.
E)   luxury goods.F) A) and B)
G) B) and E)

Question 16

Which one of the following pairs of goods is likely to have a negative cross-price elasticity of demand?

Accepted Answer

A)   purses and backpacks
B)   sofas and dining room tables
C)   manicures and pedicures
D)   shoes and socks
E)   trucks and sedansF) All of the above
G) A) and B)

Question 17

Price elasticity of demand is measured as the:

Accepted Answer

A)   change in quantity demanded divided by the change in price.
B)   change in price divided by the change in quantity demanded.
C)   percentage change in price divided by the percentage change in quantity demanded.
D)   percentage change in demand divided by the percentage change in income.
E)   percentage change in quantity demanded divided by the percentage change in price.F) A) and B)
G) C) and E)

Question 18

The initial price of picture frames is $6 and suppliers offer 20 frames. When the price falls to $4, suppliers offer only 10. The price elasticity of supply is:

Accepted Answer

A)   0.33.
B)   0.67.
C)   1.67.
D)   0.60.
E)   0.40.F) C) and D)
G) C) and E)

Question 19

If the price elasticity of supply is 2.5, we know that it is:

Accepted Answer

A)   perfectly elastic.
B)   perfectly inelastic.
C)   unitary elastic.
D)   relatively inelastic.
E)   relatively elastic.F) C) and E)
G) B) and C)

Question 20

The price elasticity supply of doctors could be considered because it takes a minimum of four to six years of training to be able to work as a physician.

Accepted Answer

A)   perfectly elastic
B)   unitary elastic
C)   relatively inelastic
D)   relatively elastic
E)   perfectly inelasticF) All of the above
G) C) and D)

Exam 4: Elasticity

Which one of the following pairs of goods is likely to have a negative cross-price elasticity of demand?

Correct Answer
verified

When the price of scooters drops by 5%, the quantity demanded changes by 20%. You know that the price elasticity of demand for scooters is:

Correct Answer
verified

Price elasticity of demand measures the change in:

Correct Answer
verified

The initial price of picture frames is $6 and suppliers offer 20 frames. When the price falls to $4, suppliers offer only 10. The price elasticity of supply is:

Correct Answer
verified

Assume that the market for pencils is in equilibrium and that demand is very price elastic. The popularity of digital tablets and electronic pens increases and demand for pencils declines. The equilibrium change in quantity demanded is:

Correct Answer
verified

If a business finds that demand for its good is very price elastic, it knows that:

Correct Answer
verified

Price elasticity of demand is measured as the:

Correct Answer
verified

At a price of $2, the quantity demanded for pens is 12. When the price increases to $3, the quantity demanded for pens is 10. The price elasticity of demand for pens is:

Correct Answer
verified

If the price elasticity of supply is 1.5, we know that supply is:

Correct Answer
verified

Correct Answer
verified
a. Students:= percentage change in quant...
View Answer

There was a more than proportional decrease in quantity demanded for cupcakes when the local baker raised the price by 20%. The price elasticity of demand for cupcakes is:

Correct Answer
verified

If the cross-price elasticity of demand is -5, Good A and Good B are:

Correct Answer
verified

Refer to the following graphs to answer the questions. Graph A Graph B Graph C Graph D Graph E -Which of these graphs most likely depicts a price elasticity of demand of -5?

Correct Answer
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Correct Answer
verified

As you move right along a demand curve, the price elasticity of demand:

Correct Answer
verified

Graph and explain the appropriate shape of the supply or demand curve for Jimmy's Jammin Jelly Beans when: a. there is a hurricane that destroys most sugarcane fields. b. a new candy vendor opens a shop in town. c. Jimmy's Jammin Jelly Beans become the hottest item to have at parties.

Correct Answer
verified
a.
Sugar, a key input into jelly beans, ...
View Answer

As you move left along the demand curve, the price elasticity of demand:

Correct Answer
verified

If the price elasticity of supply is 2.5, we know that it is:

Correct Answer
verified

The price elasticity supply of doctors could be considered because it takes a minimum of four to six years of training to be able to work as a physician.

Correct Answer
verified

Cross-price elasticity measures the relationship between:

Correct Answer
verified

Exam 4: Elasticity

Which one of the following pairs of goods is likely to have a negative cross-price elasticity of demand?

Correct AnswerverifiedShow Answer

When the price of scooters drops by 5%, the quantity demanded changes by 20%. You know that the price elasticity of demand for scooters is:

Correct AnswerverifiedShow Answer

Price elasticity of demand measures the change in:

Correct AnswerverifiedShow Answer

The initial price of picture frames is $6 and suppliers offer 20 frames. When the price falls to $4, suppliers offer only 10. The price elasticity of supply is:

Correct AnswerverifiedShow Answer

Assume that the market for pencils is in equilibrium and that demand is very price elastic. The popularity of digital tablets and electronic pens increases and demand for pencils declines. The equilibrium change in quantity demanded is:

Correct AnswerverifiedShow Answer

If a business finds that demand for its good is very price elastic, it knows that:

Correct AnswerverifiedShow Answer

Price elasticity of demand is measured as the:

Correct AnswerverifiedShow Answer

At a price of $2, the quantity demanded for pens is 12. When the price increases to $3, the quantity demanded for pens is 10. The price elasticity of demand for pens is:

Correct AnswerverifiedShow Answer

If the price elasticity of supply is 1.5, we know that supply is:

Correct AnswerverifiedShow Answer

Correct Answerverifieda. Students:= percentage change in quant...View AnswerShow Answer

There was a more than proportional decrease in quantity demanded for cupcakes when the local baker raised the price by 20%. The price elasticity of demand for cupcakes is:

Correct AnswerverifiedShow Answer

If the cross-price elasticity of demand is -5, Good A and Good B are:

Correct AnswerverifiedShow Answer

Refer to the following graphs to answer the questions. Graph A Graph B Graph C Graph D Graph E -Which of these graphs most likely depicts a price elasticity of demand of -5?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

As you move right along a demand curve, the price elasticity of demand:

Correct AnswerverifiedShow Answer

Graph and explain the appropriate shape of the supply or demand curve for Jimmy's Jammin Jelly Beans when: a. there is a hurricane that destroys most sugarcane fields. b. a new candy vendor opens a shop in town. c. Jimmy's Jammin Jelly Beans become the hottest item to have at parties.

Correct Answerverifieda.Sugar, a key input into jelly beans, ...View AnswerShow Answer

As you move left along the demand curve, the price elasticity of demand:

Correct AnswerverifiedShow Answer

If the price elasticity of supply is 2.5, we know that it is:

Correct AnswerverifiedShow Answer

The price elasticity supply of doctors could be considered because it takes a minimum of four to six years of training to be able to work as a physician.

Correct AnswerverifiedShow Answer

Cross-price elasticity measures the relationship between:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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a. Students:= percentage change in quant...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a.
Sugar, a key input into jelly beans, ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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