If a one percent increase in the population leads to a five percent increase in the quantity sold, an economist would claim A) the good is elastic with respect to population. B) the good is inelastic with respect to population. C) the good is a fad. D) consumers are misinformed about the quality of the […]
Date: September 9th, 2020
If a good has an income elasticity of demand greater than 1, one might classify that good as A) a necessity. B) a luxury. C) unusual. D) inelastic. ANSWER B
Date: September 9th, 2020
The cross price elasticity of demand for a good x is the percentage change in the quantity demanded of good x in response to a given percentage change in A) income. B) the price of good x. C) the price of good y. D) the quantity demanded of good y. ANSWER C
Date: September 9th, 2020
If the cross price elasticity of two goods is -3.5, then A) these two products are relatively elastic substitutes. B) these two products are relatively inelastic substitutes. C) these two products are relatively elastic complements. D) these two products are relatively inelastic complements. ANSWER C
Date: September 9th, 2020
The price elasticity of demand A) depends on the units in which quantity is measured. B) depends on the units in which price is measured. C) depends on the units in which money is measured. D) is independent of the units in which quantity and price are measured. ANSWER D
Date: September 9th, 2020
If the price of orange juice rises 10%, and as a result the quantity demanded falls by 10%, then one can conclude that the demand for orange juice A) is perfectly elastic. B) is inelastic. C) has a unitary elasticity. D) has a constant elasticity. ANSWER C
Date: September 9th, 2020
The current price floor in the agricultural lettuce market makes it such that the price of lettuce is 25% higher than the equilibrium price and that 100 heads of lettuce are demanded. Assuming that the elasticity of demand for lettuce is -0.50, how much would revenue (P Q) change for the lettuce company if […]
Date: September 9th, 2020
The number of vehicle types available in the United States has increased dramatically over the past thirty years. Everything else equal, this would make A) the demand for individual vehicle types to become less elastic. B) the demand for individual vehicle types to become more elastic. C) the demand for all vehicle types to become […]
Date: September 9th, 2020
Consider the following products. Which of them has the flattest demand curve? A) insulin B) alcohol C) cigarettes D) butter ANSWER D
Date: September 9th, 2020
If an increase in income results in a rightward parallel shift of the demand curve, then at any given price, the price elasticity of demand will have A) increased in absolute terms. B) decreased in absolute terms. C) remained unchanged. D) increased, decreased or stayed the same. It cannot be determined. ANSWER B
Date: September 9th, 2020
