If the demand for orange juice is expressed as Q = 2000 – 500p, where Q is measured in gallons and p is measured in dollars, then at the price of $3, the demand curve A) is elastic. B) has a unitary elasticity. C) is inelastic. D) is perfectly inelastic. ANSWER A
Date: September 9th, 2020
Suppose the demand function for a good is expressed as Q = 100 – 4p. If the good currently sells for $10, then the price elasticity of demand equals A) -1.5. B) -0.67. C) -4. D) -2.5. ANSWER B
Date: September 9th, 2020
If the demand function for orange juice is expressed as Q = 2000 – 500p, where Q is quantity in gallons and p is price per gallon measured in dollars, then the demand for orange juice has a unitary elasticity when price equals A) $0. B) $1. C) $2. D) $4. ANSWER C
Date: September 9th, 2020
If the price elasticity of demand for a good is less than one in absolute value, economists would characterize consumers of this good A) as not very sensitive to price. B) as not very sensitive to the quantity they demand. C) as very sensitive to price. D) as elastic. ANSWER A
Date: September 9th, 2020
If the supply curve of cigarettes shifts to the left, quantity demanded for cigarettes A) will decrease substantially. B) will increase substantially. C) will slightly increase. D) will slightly decrease. ANSWER D
Date: September 9th, 2020
If the demand curve for orange juice is expressed as Q = 2000 – 500p, where Q is measured in gallons and p is measured in dollars, then at the price of $3, elasticity equals A) -0.33. B) -3. C) -9. D) -17. ANSWER B
Date: September 9th, 2020
Explain why the shape of the demand curve will determine how a shock to the market equilibrium affects price and quantity. What will be an ideal response? ANSWER A flatter demand curve has a smaller slope in absolute value. That means that consumers are more sensitive to price changes. Therefore, a change in price […]
Date: September 9th, 2020
The supply-and-demand model may not be appropriate in markets with large transaction costs. Indicate whether the statement is true or false ANSWER True . If the costs of finding a trading partner are high, no trades may occur, or trades may occur at a variety of prices.
Date: September 9th, 2020
One of the biggest benefits of the Internet auction site eBay A) is its control over prices. B) is that it increases the supply of products. C) is that it increases the demand for products. D) is that it reduces transaction costs for both sellers and buyers. ANSWER D
Date: September 9th, 2020
The change in price that results from a rightward shift in demand will be greater if A) the supply curve is horizontal than if the supply curve is upward sloping. B) the supply curve is relatively steep than if the supply curve is relatively flat. C) the supply curve is upward sloping than if the […]
Date: September 9th, 2020
