Question 1

The price elasticity of demand is expressed as the

Accepted Answer

The price elasticity of demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price. This formula helps determine how responsive consumers are to changes in price.

Question 2

If the demand for bananas has a high price elasticity, then a 5 percent decrease in the price of bananas will result in

Accepted Answer

When demand is price elastic, a decrease in price leads to a more-than-proportional increase in quantity demanded. Therefore, a 5 percent decrease in the price of bananas will result in a more than 5 percent increase in the quantity demanded.

Question 3

To say that gasoline has a low price elasticity of demand is to say the quantity demanded of gasoline

Accepted Answer

A low price elasticity of demand means that the quantity demanded is not sensitive to changes in price. In other words, consumers will continue to buy roughly the same amount of gasoline even if the price increases or decreases. Therefore, choice C is the best answer.

Question 4

Explain, in words, the difference between a low price elasticity of demand and a high price elasticity of demand for a 15 percent increase in price.

Accepted Answer

The answer of Explain, in words, the difference between a...

Question 5

Assume that the price elasticity of demand equals 0.4 (e_d = 0.4). Given a 10 percent increase in price, there will be a

Accepted Answer

A price elasticity of demand of 0.4 indicates that the quantity demanded is relatively inelastic, meaning that a 10 percent increase in price would result in a proportionally smaller decrease in quantity demanded. This can be calculated as follows: % change in quantity demanded = (e_d) x (% change in price) % change in quantity demanded = (0.4) x (10%) % change in quantity demanded = 4% decrease Therefore, the correct answer is B, a 4 percent decrease in the quantity demanded.

Question 6

The concept of price elasticity of demand makes it possible to

Accepted Answer

The answer of The concept of price elasticity of demand...

Question 7

By knowing how much quantity demanded changes for a given change in price, we can also know

Accepted Answer

The answer of By knowing how much quantity demanded changes...

Question 8

The size of the price elasticity of demand is important to determine how much market price will change in response to a shift in the supply.

Accepted Answer

The size of the price elasticity of demand reflects how responsive consumers are to changes in price, and therefore helps to predict how much the market price will change in response to a shift in supply. A larger elasticity means that price changes will have a greater impact on the quantity demanded, while a smaller elasticity means that price changes will have a smaller impact on quantity demanded.

Question 9

By knowing the price elasticity of demand, economists can anticipate the size of shifts in the supply of a commodity, such as oil.

Accepted Answer

Price elasticity of demand measures how much the quantity demanded of a good responds to a change in the price of that good, not shifts in supply.

Question 10

Explain why economists care about the price elasticity of supply. What does it tell us?

Accepted Answer

The answer of Explain why economists care about the price...

Question 11

The price elasticity of demand is measured by the percentage change in quantity demanded divided by the percentage change in price.

Accepted Answer

This statement accurately defines the formula for price elasticity of demand.

Question 12

Suppose there is a sudden decrease in the supply of oranges. Compare the effect of the change in orange supply on the price of oranges in a market with high demand elasticity and a market with low demand elasticity.

Accepted Answer

The answer of Suppose there is a sudden decrease in...

Question 13

A given change in oil supply will result in a smaller change in the equilibrium price of oil if the

Accepted Answer

When the price elasticity of demand for oil is higher, it means consumers are more responsive to changes in price. Therefore, a change in oil supply will result in a smaller change in the equilibrium price because consumers will adjust their consumption more readily in response to price changes.

Question 14

Suppose that the government imposes a sales tax on the consumption of soda drinks, which of the following would have the least impact on the producers of soda drinks?

Accepted Answer

If demand for soda drinks is perfectly inelastic, it means that consumers will continue to buy the same amount of soda drinks regardless of the price increase due to the sales tax. Therefore, the producers of soda drinks will not be negatively impacted because they can still sell the same quantity at a higher price (due to the tax).

Question 15

If the price elasticity of demand is equal to 2, a 1 percent increase in price will cause the quantity demanded to ____ by ____ percent.

Accepted Answer

The price elasticity of demand of 2 means that for every 1 percent increase in price, the quantity demanded decreases by 2 percent.

Question 16

For a given reduction in the supply of oil, the equilibrium price of oil will

Accepted Answer

The answer of For a given reduction in the supply...

Question 17

If the price elasticity of demand for apples is higher than the price elasticity of demand for oranges, then a given percentage increase in the price of apples and oranges will result in more percentage decrease in the quantity demanded for apples than for oranges.

Accepted Answer

A higher price elasticity of demand means that a small change in price will result in a larger change in the quantity demanded. Therefore, a given percentage increase in the price of both apples and oranges will result in a larger percentage decrease in the quantity demanded for apples compared to oranges.

Question 18

Does a price floor result in a shortage or a surplus? Why?

Accepted Answer

The answer of Does a price floor result in a...

Question 19

The size of the price elasticity of demand is important to determine how much market price will change in response to a shift in the supply.

Accepted Answer

The size of price elasticity of demand is a measure of the responsiveness of quantity demanded to a change in price. It helps in determining the extent of price change needed to balance a shift in the supply. A high elasticity means that a small change in price can cause a large change in quantity demanded, while a low elasticity indicates that a large price change may be required to have any significant impact on quantity demanded. Therefore, the size of price elasticity of demand is important in predicting how much market price will change in response to a change in supply.

Question 20

The price elasticity of demand measures

Accepted Answer

The price elasticity of demand measures a buyer's responsiveness to a change in price. It tells us how much the quantity demanded changes when there is a change in price. If the demand is elastic, a small change in price will result in a large change in quantity demanded, while if the demand is inelastic, a change in price will result in a small change in quantity demanded.

Quiz 4: Subtleties of the Supply and Demand Model

The price elasticity of demand is expressed as the

If the demand for bananas has a high price elasticity, then a 5 percent decrease in the price of bananas will result in

To say that gasoline has a low price elasticity of demand is to say the quantity demanded of gasoline

Explain, in words, the difference between a low price elasticity of demand and a high price elasticity of demand for a 15 percent increase in price.

Assume that the price elasticity of demand equals 0.4 (e_d = 0.4) . Given a 10 percent increase in price, there will be a

The concept of price elasticity of demand makes it possible to

By knowing how much quantity demanded changes for a given change in price, we can also know

The size of the price elasticity of demand is important to determine how much market price will change in response to a shift in the supply.

By knowing the price elasticity of demand, economists can anticipate the size of shifts in the supply of a commodity, such as oil.

Explain why economists care about the price elasticity of supply. What does it tell us?

The price elasticity of demand is measured by the percentage change in quantity demanded divided by the percentage change in price.

Suppose there is a sudden decrease in the supply of oranges. Compare the effect of the change in orange supply on the price of oranges in a market with high demand elasticity and a market with low demand elasticity.

A given change in oil supply will result in a smaller change in the equilibrium price of oil if the

Suppose that the government imposes a sales tax on the consumption of soda drinks, which of the following would have the least impact on the producers of soda drinks?

If the price elasticity of demand is equal to 2, a 1 percent increase in price will cause the quantity demanded to by percent.

For a given reduction in the supply of oil, the equilibrium price of oil will

If the price elasticity of demand for apples is higher than the price elasticity of demand for oranges, then a given percentage increase in the price of apples and oranges will result in more percentage decrease in the quantity demanded for apples than for oranges.

Does a price floor result in a shortage or a surplus? Why?

The size of the price elasticity of demand is important to determine how much market price will change in response to a shift in the supply.

The price elasticity of demand measures

Quiz 4: Subtleties of the Supply and Demand Model

The price elasticity of demand is expressed as the

If the demand for bananas has a high price elasticity, then a 5 percent decrease in the price of bananas will result in

To say that gasoline has a low price elasticity of demand is to say the quantity demanded of gasoline

Explain, in words, the difference between a low price elasticity of demand and a high price elasticity of demand for a 15 percent increase in price.

Assume that the price elasticity of demand equals 0.4 (ed = 0.4) . Given a 10 percent increase in price, there will be a

The concept of price elasticity of demand makes it possible to

By knowing how much quantity demanded changes for a given change in price, we can also know

The size of the price elasticity of demand is important to determine how much market price will change in response to a shift in the supply.

By knowing the price elasticity of demand, economists can anticipate the size of shifts in the supply of a commodity, such as oil.

Explain why economists care about the price elasticity of supply. What does it tell us?

The price elasticity of demand is measured by the percentage change in quantity demanded divided by the percentage change in price.

Suppose there is a sudden decrease in the supply of oranges. Compare the effect of the change in orange supply on the price of oranges in a market with high demand elasticity and a market with low demand elasticity.

A given change in oil supply will result in a smaller change in the equilibrium price of oil if the

Suppose that the government imposes a sales tax on the consumption of soda drinks, which of the following would have the least impact on the producers of soda drinks?

If the price elasticity of demand is equal to 2, a 1 percent increase in price will cause the quantity demanded to ____ by ____ percent.

For a given reduction in the supply of oil, the equilibrium price of oil will

If the price elasticity of demand for apples is higher than the price elasticity of demand for oranges, then a given percentage increase in the price of apples and oranges will result in more percentage decrease in the quantity demanded for apples than for oranges.

Does a price floor result in a shortage or a surplus? Why?

The size of the price elasticity of demand is important to determine how much market price will change in response to a shift in the supply.

The price elasticity of demand measures

Assume that the price elasticity of demand equals 0.4 (e_d = 0.4) . Given a 10 percent increase in price, there will be a

If the price elasticity of demand is equal to 2, a 1 percent increase in price will cause the quantity demanded to by percent.