Question 1

If per capita income increases by 10% and household expenditure on fur coats increases by 15%, one can conclude that the price elasticity of demand for fur coats is

Accepted Answer

The answer of If per capita income increases by 10%...

Question 2

With a downward-sloping straight-line demand curve, price elasticity of demand is

Accepted Answer

The answer of With a downward-sloping straight-line demand curve, price...

Question 3

As the price for some product increases from $4.00 to $5.00 per unit, quantity demanded decreases from 400 to 300 units per month. For this segment of the demand curve, the price elasticity of demand is

Accepted Answer

The answer of As the price for some product increases...

Question 4

Which of the following statements about price elasticity of demand is true?

Accepted Answer

The answer of Which of the following statements about price...

Question 5

Suppose egg producers succeed in permanently raising the price of their product by 15%, and as a result the quantity demanded falls by 15% in the short run. In the long run we can expect the quantity demanded to fall by

Accepted Answer

In the short run, consumers may not have many alternatives to eggs and may continue to buy them despite the price increase. However, in the long run, consumers may have more time to adjust their diets and find substitutes for eggs, causing the quantity demanded to fall even more than the initial 15%. Additionally, producers may respond to the higher prices by increasing their supply of eggs, which can further decrease the quantity demanded if consumers find the higher prices too expensive. Therefore, it is reasonable to expect the quantity demanded to fall by more than 15% in the long run.

Question 6

Suppose that the quantity demanded of a good rises from 40 units to 60 units per month when the price falls from $1.05 to 95 cents per unit. The price elasticity of demand for this product is

Accepted Answer

The answer of Suppose that the quantity demanded of a...

Question 7

Which of the following illustrates elastic demand?

Accepted Answer

Elastic demand is characterized by a higher percentage change in quantity demanded with a relatively small change in price. In this case, a 5% increase in price leads to a 10% decrease in quantity demanded, indicating that demand is highly responsive to price changes.

Question 8

FIGURE 4-1
-Refer to Figure 4-1, which shows two demand curves, one linear and the other a rectangular hyperbola. In diagram 1, the price elasticity of demand

Accepted Answer

The price elasticity of demand at point A is steeper than at point C, indicating a greater degree of responsiveness to changes in price. This is because the slope of the demand curve at point A is steeper (has a larger absolute value) than at point C. Therefore, point A has a higher elasticity of demand than point C.

Question 9

Suppose you are shown two intersecting demand curves that are drawn on the same scale. At the point of intersection, one of the demand curves is steeper than the other. Which of the following could explain the difference in slopes?

Accepted Answer

The answer of Suppose you are shown two intersecting demand...

Question 10

As the price for some product decreases from $4.00 to $3.00 per unit, quantity demanded increases from 400 to 500 units per day. For this segment of the demand curve, the price elasticity of demand is

Accepted Answer

The answer of As the price for some product decreases...

Question 11

Demand Schedule for Ski Tickets
  TABLE 4-2
-Refer to Table 4-2. Using the data provided to plot the demand curve for ski tickets results in a
Demand curve. Price elasticity along this demand curve is therefore as price is falling.

Accepted Answer

The demand curve for ski tickets based on the data provided is downward sloping and linear, which means as the price of ski tickets decreases, the quantity demanded increases at a constant rate. This indicates a price elasticity of demand that is continuously decreasing along the demand curve. Therefore, the best choice is E.

Question 12

The price elasticity of demand for a product tends to be greater the

Accepted Answer

The price elasticity of demand tends to be greater when there are more close substitutes for the product, as consumers have more options to choose from and are more likely to switch to a substitute if the price of the original product increases.

Question 13

Suppose that the quantity demanded of paperback novels rises from 80 000 to 120 000 units per month when the price falls from $11 to $9 per unit. The price elasticity of demand for this product is

Accepted Answer

The answer of Suppose that the quantity demanded of paperback...

Question 14

Which of the following statements would you expect to be true about price elasticities of demand for T -shirts and clothing?

Accepted Answer

The answer of Which of the following statements would you...

Question 15

Which of the following illustrates elastic demand?

Accepted Answer

Elastic demand is when a small change in price causes a relatively larger change in quantity demanded. Option B shows that a 10% increase in price causes a 20% decrease in quantity demanded, indicating elastic demand. A is not elastic enough, C and D do not give information about the degree of elasticity, and E shows a unitary elastic demand where the percentage change in quantity demanded is the same as the percentage change in price.

Question 16

A perfectly horizontal demand curve shows that the price elasticity of demand is

Accepted Answer

The answer of A perfectly horizontal demand curve shows that...

Question 17

Which of the following statements would you expect to be true about the demand elasticities for cornflakes and food?

Accepted Answer

The answer of Which of the following statements would you...

Question 18

FIGURE 4-1
-Refer to Figure 4-1, which shows two demand curves, one linear and the other a rectangular hyperbola. The price elasticity of demand is equal to one along the entire demand curve in

Accepted Answer

The answer of  FIGURE 4-1
-Refer to Figure 4-1, which...

Question 19

Demand Schedule for Ski Tickets
  TABLE 4-2
-Refer to Table 4-2. Total expenditure for ski tickets reaches a maximum at a price/quantity demanded combination of

Accepted Answer

The maximum total expenditure occurs at the price/quantity demanded combination of $60/600. This can be seen by finding the point on the demand schedule where the product of price and quantity demanded is highest. This occurs at $60/600, where the total expenditure is $36,000. At any other price/quantity combination, the total expenditure is lower. Therefore, $60/600 is the best choice.

Question 20

A vertical demand curve shows that the price elasticity of demand is

Accepted Answer

A vertical demand curve indicates that the quantity demanded does not change with a change in price, meaning that the price elasticity of demand is zero or perfectly inelastic.

Quiz 4: Elasticity

If per capita income increases by 10% and household expenditure on fur coats increases by 15%, one can conclude that the price elasticity of demand for fur coats is

With a downward-sloping straight-line demand curve, price elasticity of demand is

As the price for some product increases from $4.00 to $5.00 per unit, quantity demanded decreases from 400 to 300 units per month. For this segment of the demand curve, the price elasticity of demand is

Which of the following statements about price elasticity of demand is true?

Suppose egg producers succeed in permanently raising the price of their product by 15%, and as a result the quantity demanded falls by 15% in the short run. In the long run we can expect the quantity demanded to fall by

Suppose that the quantity demanded of a good rises from 40 units to 60 units per month when the price falls from $1.05 to 95 cents per unit. The price elasticity of demand for this product is

Which of the following illustrates elastic demand?

FIGURE 4-1 -Refer to Figure 4-1, which shows two demand curves, one linear and the other a rectangular hyperbola. In diagram 1, the price elasticity of demand

Suppose you are shown two intersecting demand curves that are drawn on the same scale. At the point of intersection, one of the demand curves is steeper than the other. Which of the following could explain the difference in slopes?

As the price for some product decreases from $4.00 to $3.00 per unit, quantity demanded increases from 400 to 500 units per day. For this segment of the demand curve, the price elasticity of demand is

Demand Schedule for Ski Tickets TABLE 4-2 -Refer to Table 4-2. Using the data provided to plot the demand curve for ski tickets results in a Demand curve. Price elasticity along this demand curve is therefore as price is falling.

The price elasticity of demand for a product tends to be greater the

Suppose that the quantity demanded of paperback novels rises from 80 000 to 120 000 units per month when the price falls from $11 to $9 per unit. The price elasticity of demand for this product is

Which of the following statements would you expect to be true about price elasticities of demand for T -shirts and clothing?

Which of the following illustrates elastic demand?

A perfectly horizontal demand curve shows that the price elasticity of demand is

Which of the following statements would you expect to be true about the demand elasticities for cornflakes and food?

FIGURE 4-1 -Refer to Figure 4-1, which shows two demand curves, one linear and the other a rectangular hyperbola. The price elasticity of demand is equal to one along the entire demand curve in

Demand Schedule for Ski Tickets TABLE 4-2 -Refer to Table 4-2. Total expenditure for ski tickets reaches a maximum at a price/quantity demanded combination of

A vertical demand curve shows that the price elasticity of demand is