Question 1

To keep the percentage change in quantity demanded equally proportional to the percentage change in price when the prices rise by 5%,a consumer would need to ________ quantity demanded by ________.

Accepted Answer

To keep the percentage change in quantity demanded equally proportional to the percentage change in price, the consumer needs to decrease the quantity demanded by the same percentage as the price increase, which is 5%.

Question 2

Without using a graph,explain the difference between a movement along a demand curve and a shift in the entire demand curve.

Accepted Answer

The answer of Without using a graph,explain the difference between...

Question 3

If the elasticity of demand for Good A is -3,a 33% decrease in quantity demanded of Good A results from a(n)________ in the price of Good A.

Accepted Answer

Elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. If the elasticity is -3 and the quantity demanded decreases by 33%, the price must have increased by 11% (since -3 = -33% / 11%).

Question 4

Goods that are necessities are very likely to have:

Accepted Answer

Goods that are necessities have a high degree of inelasticity in their demand, meaning that changes in price have little effect on the quantity demanded. This is because consumers will continue to purchase these goods, even if the price increases, as they are essential for their daily lives.

Question 5

Price elasticity of demand is measured as the:

Accepted Answer

Price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price, which accurately reflects how sensitive the quantity demanded of a good is to a change in its price.

Question 6

The city of Barlow is known for its wide variety of ice cream shops.What will happen if Nick's Ice Cream Palace raises the price of its shakes?

Accepted Answer

Since Barlow has a variety of ice cream shops, consumers have other options to choose from. Therefore, if the price of shakes at Nick's Ice Cream Palace is raised, consumers are likely to switch to other ice cream shops, resulting in a decrease in the quantity demanded. The decrease in quantity demanded is likely to be greater than the increase in the price.

Question 7

When quantity demanded and price increase by 10%,you know that price and quantity are ________ to the consumer.

Accepted Answer

When both quantity demanded and price increase by the same percentage, it suggests that price and quantity are equally important to the consumer, as the consumer is willing to pay more for the same proportional increase in quantity.

Question 8

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 more than proportional decrease in quantity demanded indicates a relatively high price elasticity of demand. Thus, the demand for cupcakes is elastic.

Question 9

A producer knows that the price elasticity for his product is -0.5.He wants to increase quantity demanded by 30%.By what percentage does he need to change the price?

Accepted Answer

The answer of A producer knows that the price elasticity...

Question 10

Demand is almost always more price elastic in the long run because:

Accepted Answer

In the long run, consumers have more time to adjust their consumption habits and can find alternative options, leading to a higher price elasticity of demand. A, B, C, and E do not directly relate to changes in consumer behavior or decision-making.

Question 11

When would oil producers see the largest percentage decline in the quantity demanded for oil due to an increase in the price of oil today?

Accepted Answer

The largest percentage decline in the quantity demanded for oil due to an increase in the price of oil today would be seen in the long term (15 years in this case), as consumers and industries have more time to adjust their behaviors, invest in energy-efficient technologies, or switch to alternative energy sources.

Question 12

You are given the following demand schedule:
  
a.Graph the information from this demand schedule.Be sure to label everything.
b.Graph the following demand schedule:
  
c.What happened to the demand curve?
d.List five things that could make the demand curve reflect your answer in part

Accepted Answer

The answer of You are given the following demand schedule:
...

Question 13

When the price increases by 30% and the quantity demanded drops by 10%,the price elasticity of demand is:

Accepted Answer

Price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is -10%/30% = -0.33, which is less than 1, indicating inelastic demand.

Question 14

Cellphone companies found that when they raised the price of connecting to wireless hot spots,demand decreased more than proportionally among casual users but decreased less than proportionally among businesspeople.This is because wireless connectivity is a(n)________ good for casual users but a(n)________ good for businesspeople.

Accepted Answer

The answer of Cellphone companies found that when they raised...

Question 15

At a price of $5/hour,Bob wants to hire three workers.When the price rises to $7/hour,Bob wants to hire only two workers.Bob's price elasticity of demand for workers is:

Accepted Answer

The price elasticity of demand is calculated using the formula: (percentage change in quantity demanded) / (percentage change in price). The quantity demanded changes from 3 to 2 workers, a decrease of 33.33%, and the price increases from $5 to $7, an increase of 40%. Thus, the elasticity is -33.33% / 40% = -0.83.

Question 16

Nita is a devoted Coca-Cola consumer,whereas Becky can drink either Coca-Cola or Pepsi products.Nita's demand for Coca-Cola will be relatively more ________,while Becky's demand will be relatively more ________.

Accepted Answer

Nita has a devoted preference towards Coca-Cola, which means she is less likely to switch to another brand and will have a relatively inelastic demand. On the other hand, Becky has a more flexible preference and can switch to either Coca-Cola or Pepsi, making her demand relatively more elastic.

Question 17

Chris runs a sporting goods store and knows that the price elasticity of demand for his sports clothing line is -1.5.He is planning to lower prices by 10%.The percentage change in quantity demanded will be:

Accepted Answer

The price elasticity of demand formula is: % change in quantity demanded = elasticity * % change in price. Here, -1.5 * (-10%) = 15%.

Question 18

Assume that the market for cheeseburgers consists of only three individuals: Jerry,George,and Elaine.Here are their demand schedules:
  
From the information in demand schedules,answer the following questions: 
a.If the price of a cheeseburger were $2, how many cheeseburgers would be sold?
b.If the price of a cheeseburger were $8, how many cheeseburgers would be sold?
c.Construct the market demand schedule for cheeseburgers.

Accepted Answer

The answer of Assume that the market for cheeseburgers consists...

Question 19

Compare and contrast the following sets of words:
a.normal good versus inferior good
b.substitute good versus complementary good
c.a supply curve versus a supply schedule
d.the law of demand versus the law of supply

Accepted Answer

The answer of Compare and contrast the following sets of...

Question 20

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

The formula to calculate price elasticity of demand is (% change in quantity demanded)/(%change in price). In this case, we are given that the price drops by 5% and the quantity demanded changes by 20%. So, the % change in quantity demanded is 20%/100% = 0.2 and the % change in price is -5%/100% = -0.05. 
Using the formula, we get:
Price elasticity of demand = 0.2/-0.05 = -4 
Since the elasticity value is greater than 1, we can classify the demand for scooters as elastic. Therefore, the best choice is D, which indicates an elastic demand.

Quiz 3: The Market at Work: Supply and Demand

To keep the percentage change in quantity demanded equally proportional to the percentage change in price when the prices rise by 5%,a consumer would need to quantity demanded by .