Question 1

Exhibit 19-3
 
-Refer to Exhibit 19-3. When price decreases from $4.50 to $3.50, the price elasticity of demand is

Accepted Answer

The price elasticity of demand is calculated using the formula: (percentage change in quantity demanded) / (percentage change in price). If the elasticity is greater than 1, it indicates elastic demand. The given options suggest that the correct calculation results in an elasticity of 2.00, indicating a relatively elastic demand.

Question 2

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. As a result,

Accepted Answer

The answer of Exhibit 19-2
​
 
-Refer to Exhibit 19-2. The...

Question 3

Exhibit 19-3
 
-Refer to Exhibit 19-3. When price decreases from $5.50 to $4.50, the price elasticity of demand is

Accepted Answer

The answer of Exhibit 19-3
 
-Refer to Exhibit 19-3. When...

Question 4

If the demand for a good is inelastic and the price of the good decreases, then

Accepted Answer

When demand is inelastic, a decrease in price leads to a proportionally smaller increase in quantity demanded, resulting in a decrease in total revenue.

Question 5

A per-unit tax is placed on the production of good Y. Someone who believes that the producers of the good will end up paying the full tax may be assuming that the good's demand curve is

Accepted Answer

If the demand curve is perfectly elastic, consumers will not tolerate any price increase, forcing producers to absorb the full tax.

Question 6

Suppose that when the price of water rises by 30 percent, the quantity demanded falls by 10 percent. The price elasticity of demand for water is ____________, making water an _______________ good (in this example).

Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price, which in this case is -10%/30% = -0.33. Since the absolute value is less than 1, water is considered an inelastic good.

Question 7

Exhibit 19-3
 
-Refer to Exhibit 19-3. If price decreases from $1.50 to $0.50, total revenue along the demand curve

Accepted Answer

The answer of Exhibit 19-3
 
-Refer to Exhibit 19-3. If...

Question 8

If the demand for a good is currently elastic, then

Accepted Answer

When demand is elastic, a given percentage change in price leads to a larger percentage change in quantity demanded, meaning consumers are more responsive to price changes.

Question 9

Exhibit 19-3
 
-Refer to Exhibit 19-3. If price increases from $2.50 to $3.50, total revenue along the demand curve

Accepted Answer

The answer of Exhibit 19-3
 
-Refer to Exhibit 19-3. If...

Question 10

Suppose someone believes that if a per-unit tax is placed on the producers of good Y, the consumers of good Y will end up paying the full tax. This person assumes that the demand curve for good Y is

Accepted Answer

If the demand curve for good Y is perfectly inelastic, consumers are completely unresponsive to price changes, meaning they will continue to buy the same quantity regardless of any price increase. Therefore, if a per-unit tax is placed on producers, the full tax can be passed on to consumers without reducing the quantity demanded.

Question 11

Suppose that when the price of cigarettes decreases by 20 percent, the quantity demanded increases by 10 percent. The price elasticity of demand for cigarettes is __________, making cigarettes an ____________ product (in this example).

Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is 10% / 20% = 0.5. A value less than 1 indicates an inelastic demand, meaning the quantity demanded is relatively unresponsive to price changes.

Question 12

If the demand for a good is unit elastic, then

Accepted Answer

When the demand for a good is unit elastic, it means that the percentage change in quantity demanded is exactly equal to the percentage change in price. This is the definition of unit elasticity.

Question 13

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. What is the per-unit tax equal to?

Accepted Answer

The answer of Exhibit 19-2
​
 
-Refer to Exhibit 19-2. The...

Question 14

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. Approximately what percentage of the tax do producers end up paying?

Accepted Answer

The percentage of the tax that producers pay is determined by the relative elasticities of supply and demand. The shift from S1 to S2 indicates the tax burden distribution, and in this scenario, producers pay approximately 45 percent of the tax.

Question 15

Exhibit 19-3
 
-Refer to Exhibit 19-3. If price decreases from $5.50 to $4.50, total revenue along the demand curve

Accepted Answer

The answer of Exhibit 19-3
 
-Refer to Exhibit 19-3. If...

Question 16

The price elasticity of demand is the percentage change in

Accepted Answer

The answer of The price elasticity of demand is the...

Question 17

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. Approximately what percentage of the tax do consumers end up paying?

Accepted Answer

The answer of Exhibit 19-2
​
 
-Refer to Exhibit 19-2. The...

Question 18

If the demand for a good is unit elastic and the price of the good increases, then

Accepted Answer

When demand is unit elastic, a price increase does not affect total revenue because the percentage change in quantity demanded exactly offsets the percentage change in price.

Question 19

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X as shown by the shift of S₁ to S₂. What is an expression for the tax revenue raised?

Accepted Answer

The tax revenue is calculated as the tax per unit ($2.25) multiplied by the quantity sold after the tax (Q₂).

Question 20

If the demand for a good is perfectly inelastic, then

Accepted Answer

When demand for a good is perfectly inelastic, it means that the quantity demanded does not change in response to a change in price. This is why option E is correct, as it states that quantity demanded is not responsive to changes in price.

Quiz 19: Elasticity

Exhibit 19-3 -Refer to Exhibit 19-3. When price decreases from $4.50 to $3.50, the price elasticity of demand is

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. As a result,

Exhibit 19-3 -Refer to Exhibit 19-3. When price decreases from $5.50 to $4.50, the price elasticity of demand is

If the demand for a good is inelastic and the price of the good decreases, then

A per-unit tax is placed on the production of good Y. Someone who believes that the producers of the good will end up paying the full tax may be assuming that the good's demand curve is

Suppose that when the price of water rises by 30 percent, the quantity demanded falls by 10 percent. The price elasticity of demand for water is , making water an ___ good (in this example) .

Exhibit 19-3 -Refer to Exhibit 19-3. If price decreases from $1.50 to $0.50, total revenue along the demand curve

If the demand for a good is currently elastic, then

Exhibit 19-3 -Refer to Exhibit 19-3. If price increases from $2.50 to $3.50, total revenue along the demand curve

Suppose someone believes that if a per-unit tax is placed on the producers of good Y, the consumers of good Y will end up paying the full tax. This person assumes that the demand curve for good Y is

Suppose that when the price of cigarettes decreases by 20 percent, the quantity demanded increases by 10 percent. The price elasticity of demand for cigarettes is , making cigarettes an __ product (in this example) .

If the demand for a good is unit elastic, then

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. What is the per-unit tax equal to?

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. Approximately what percentage of the tax do producers end up paying?

Exhibit 19-3 -Refer to Exhibit 19-3. If price decreases from $5.50 to $4.50, total revenue along the demand curve

The price elasticity of demand is the percentage change in

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. Approximately what percentage of the tax do consumers end up paying?

If the demand for a good is unit elastic and the price of the good increases, then

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X as shown by the shift of S₁ to S₂. What is an expression for the tax revenue raised?

If the demand for a good is perfectly inelastic, then

Quiz 19: Elasticity

Exhibit 19-3 -Refer to Exhibit 19-3. When price decreases from $4.50 to $3.50, the price elasticity of demand is

Exhibit 19-2 ​ -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S1 to S2. As a result,

Exhibit 19-3 -Refer to Exhibit 19-3. When price decreases from $5.50 to $4.50, the price elasticity of demand is

If the demand for a good is inelastic and the price of the good decreases, then

A per-unit tax is placed on the production of good Y. Someone who believes that the producers of the good will end up paying the full tax may be assuming that the good's demand curve is

Suppose that when the price of water rises by 30 percent, the quantity demanded falls by 10 percent. The price elasticity of demand for water is ____________, making water an _______________ good (in this example) .

Exhibit 19-3 -Refer to Exhibit 19-3. If price decreases from $1.50 to $0.50, total revenue along the demand curve

If the demand for a good is currently elastic, then

Exhibit 19-3 -Refer to Exhibit 19-3. If price increases from $2.50 to $3.50, total revenue along the demand curve

Suppose someone believes that if a per-unit tax is placed on the producers of good Y, the consumers of good Y will end up paying the full tax. This person assumes that the demand curve for good Y is

Suppose that when the price of cigarettes decreases by 20 percent, the quantity demanded increases by 10 percent. The price elasticity of demand for cigarettes is __________, making cigarettes an ____________ product (in this example) .

If the demand for a good is unit elastic, then

Exhibit 19-2 ​ -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S1 to S2. What is the per-unit tax equal to?

Exhibit 19-2 ​ -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S1 to S2. Approximately what percentage of the tax do producers end up paying?

Exhibit 19-3 -Refer to Exhibit 19-3. If price decreases from $5.50 to $4.50, total revenue along the demand curve

The price elasticity of demand is the percentage change in

Exhibit 19-2 ​ -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S1 to S2. Approximately what percentage of the tax do consumers end up paying?

If the demand for a good is unit elastic and the price of the good increases, then

Exhibit 19-2 ​ -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X as shown by the shift of S1 to S2. What is an expression for the tax revenue raised?

If the demand for a good is perfectly inelastic, then

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. As a result,

Suppose that when the price of water rises by 30 percent, the quantity demanded falls by 10 percent. The price elasticity of demand for water is , making water an ___ good (in this example) .

Suppose that when the price of cigarettes decreases by 20 percent, the quantity demanded increases by 10 percent. The price elasticity of demand for cigarettes is , making cigarettes an __ product (in this example) .

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. What is the per-unit tax equal to?

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. Approximately what percentage of the tax do producers end up paying?

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. Approximately what percentage of the tax do consumers end up paying?

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X as shown by the shift of S₁ to S₂. What is an expression for the tax revenue raised?