Question 1

In a typical demand curve,the price elastic portion of demand is found in the ________ region and the price inelastic portion of demand is found in the ________ region of the graph.

Accepted Answer

In a typical demand curve, the price elastic portion of demand is found in the upper region, where small changes in price cause a large change in quantity demanded. The price inelastic portion of demand is found in the lower region, where changes in price have a relatively small effect on quantity demanded. Therefore, choice C is the best answer.

Question 2

The local bakery calculates the price elasticity of demand for its cinnamon rolls to be -1.25.This tells the owners that demand is ________ and price is ________ to the buyer.

Accepted Answer

A price elasticity of demand of greater than 1 indicates that demand is elastic, meaning that price is more important than the quantity to the buyer.

Question 3

Sellers of bottled water find that whether the price falls or rises,the quantity bought by consumers remains unchanged every week.The price elasticity of demand for bottled water is

Accepted Answer

Since the quantity demanded of bottled water remains unchanged regardless of the price changes, the price elasticity of demand is perfectly inelastic. This indicates that consumers view bottled water as a necessity and are willing to pay any price for it, which makes demand for bottled water insensitive to price changes.

Question 4

When the total revenue is unchanged despite the change in price,demand is

Accepted Answer

When the change in price results in a proportional change in quantity demanded, demand is considered to be unitary elastic. In this case, the total revenue remains the same regardless of the change in price.

Question 5

When the price of softballs is high,a ________ in price will raise total revenue.When the price is low,the seller should ________ the price to increase total revenue.

Accepted Answer

This is based on the concept of price elasticity of demand. When the price of softballs is high and demand is elastic, a decrease in price will lead to a proportionally larger increase in quantity demanded, raising total revenue. Conversely, when the price is low and demand is inelastic, raising the price will lead to a smaller proportionate decrease in quantity demanded, also increasing total revenue.

Question 6

Cell phone 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 Cell phone companies found that when they...

Question 7

As we move left along the demand curve,the price elasticity of demand

Accepted Answer

As we move left along the demand curve, the price elasticity of demand becomes more elastic. This is because as the price decreases, the quantity demanded increases at a faster rate. With more substitutes available at lower prices, consumers have more options and are more likely to switch to alternative products, making the demand more elastic.

Question 8

As we move right along a demand curve,the price elasticity of demand

Accepted Answer

As we move right along a demand curve, the quantity demanded increases while the price decreases, leading to a situation where changes in price result in smaller percentage changes in quantity demanded. This makes the demand more inelastic.

Question 9

When the total revenue and price both move in the same direction (are directly related),demand is

Accepted Answer

When the total revenue and price move in the same direction, it is an indication that the demand is inelastic. This means that changes in price have a relatively small effect on the quantity demanded, causing total revenue to move in the same direction as the price.

Question 10

At higher prices,the price elasticity of demand is likely to be ________,whereas it is likely to be ________ at lower prices.

Accepted Answer

At higher prices, consumers are more sensitive to price changes, making the demand more elastic. At lower prices, consumers are less sensitive to price changes, making the demand more inelastic.

Question 11

From the accompanying table,we can see that the demand curve for ice skates by hockey players will be ________ the demand curve for recreational skaters.

Accepted Answer

The demand curve for ice skates by hockey players will be steeper than the demand curve for recreational skaters because hockey players have a higher demand for ice skates and are likely to be more sensitive to changes in price. Recreational skaters may be more willing to substitute other activities for ice skating if the price of skates increases, whereas hockey players may not have as many substitutes and therefore will have a more inelastic demand.

Question 12

There was a more than proportional decrease in quantity demanded for cupcakes when the local baker raised the price by 20 percent.The price elasticity of demand for cupcakes is

Accepted Answer

The more than proportional decrease in quantity demanded for cupcakes indicates that consumers are sensitive to changes in price, making the demand for cupcakes elastic.

Question 13

Assume that the market for pencils is in equilibrium and that demand is very price elastic.The popularity of digital tablets and electronic pens increases and demand for pencils declines.The equilibrium change in quantity demanded is

Accepted Answer

If demand for pencils declines due to the popularity of digital tablets and electronic pens, the equilibrium change in quantity demanded will be relatively large because demand is very price elastic. This means that a small change in price will cause a relatively large change in quantity demanded. Therefore, the decline in demand for pencils will cause a significant decrease in the quantity demanded of pencils.

Question 14

Refer to the following graphs to answer the following questions.
A.  B.  C.  D.  E. 
-Which graph most likely shows the price elasticity of demand for the following situation: Lin's Boots can sell out its entire stock of shoe polish at $2.50 but can sell none if it raises the price to $2.55?

Accepted Answer

The answer of Refer to the following graphs to answer...

Question 15

Refer to the following graphs to answer the following questions.
A.  B.  C.  D.  E. 
-Which of these graphs most likely depicts a price elasticity of demand of -5?

Accepted Answer

The answer of Refer to the following graphs to answer...

Question 16

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 17

Refer to the following graphs to answer the following questions.
A.  B.  C.  D.  E. 
-Which of these graphs represents perfectly price inelastic demand for a good?

Accepted Answer

Graph A represents perfectly price inelastic demand because the quantity demanded remains constant even as the price changes.

Question 18

Refer to the following graphs to answer the following questions.
A.  B.  C.  D.  E. 
-Which of these graphs represents relatively price elastic demand for a good?

Accepted Answer

The answer of Refer to the following graphs to answer...

Question 19

Refer to the following graphs to answer the following questions.
A.  B.  C.  D.  E. 
-Which of these graphs most likely depicts a price elasticity of demand of -0.2?

Accepted Answer

The answer of Refer to the following graphs to answer...

Question 20

Lee says that he will always spend $20 a week on lattes.Lee's demand for lattes is price

Accepted Answer

Lee's demand for lattes is unitary elastic because he adjusts the quantity he buys to ensure he always spends the same total amount ($20), regardless of price changes.

Quiz 4: Elasticity

In a typical demand curve,the price elastic portion of demand is found in the region and the price inelastic portion of demand is found in the region of the graph.

The local bakery calculates the price elasticity of demand for its cinnamon rolls to be -1.25.This tells the owners that demand is and price is to the buyer.

Sellers of bottled water find that whether the price falls or rises,the quantity bought by consumers remains unchanged every week.The price elasticity of demand for bottled water is

When the total revenue is unchanged despite the change in price,demand is

When the price of softballs is high,a in price will raise total revenue.When the price is low,the seller should the price to increase total revenue.

As we move left along the demand curve,the price elasticity of demand

As we move right along a demand curve,the price elasticity of demand

When the total revenue and price both move in the same direction (are directly related) ,demand is

At higher prices,the price elasticity of demand is likely to be ,whereas it is likely to be at lower prices.

From the accompanying table,we can see that the demand curve for ice skates by hockey players will be ________ the demand curve for recreational skaters.

There was a more than proportional decrease in quantity demanded for cupcakes when the local baker raised the price by 20 percent.The price elasticity of demand for cupcakes is

Assume that the market for pencils is in equilibrium and that demand is very price elastic.The popularity of digital tablets and electronic pens increases and demand for pencils declines.The equilibrium change in quantity demanded is

Refer to the following graphs to answer the following questions. A. B. C. D. E. -Which graph most likely shows the price elasticity of demand for the following situation: Lin's Boots can sell out its entire stock of shoe polish at $2.50 but can sell none if it raises the price to $2.55?

Refer to the following graphs to answer the following questions. A. B. C. D. E. -Which of these graphs most likely depicts a price elasticity of demand of -5?

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?

Refer to the following graphs to answer the following questions. A. B. C. D. E. -Which of these graphs represents perfectly price inelastic demand for a good?

Refer to the following graphs to answer the following questions. A. B. C. D. E. -Which of these graphs represents relatively price elastic demand for a good?

Refer to the following graphs to answer the following questions. A. B. C. D. E. -Which of these graphs most likely depicts a price elasticity of demand of -0.2?

Lee says that he will always spend $20 a week on lattes.Lee's demand for lattes is price