Question 1

The price elasticity of demand depends on
A) the units used to measure price and the units used to measure quantity.
B) the units used to measure price but not the units used to measure quantity.
C) the units used to measure quantity but not the units used to measure price.
D) neither the units used to measure price nor the units used to measure quantity.

Accepted Answer

Price elasticity of demand is a unit-free measure because it is calculated as the percentage change in quantity demanded divided by the percentage change in price, making it independent of the units used.

Question 2

The price elasticity of demand is defined as the magnitude of the
A) change in quantity demanded divided by the change in price.
B) change in price divided by the change in quantity demanded.
C) percentage change in quantity demanded divided by the percentage change in price.
D) percentage change in price divided by the percentage change in quantity demanded.

Accepted Answer

The price elasticity of demand measures how much the quantity demanded of a good responds to a change in the price of that good, calculated as the percentage change in quantity demanded divided by the percentage change in price.

Question 3

The price elasticity of demand for purses is measured in what units?
A) dollars
B) purses
C) dollars per purse
D) The price elasticity of demand is a unitless measure.

Accepted Answer

The price elasticity of demand is a unitless measure because it is a ratio of percentage changes, which cancels out the units.

Question 4

If a 6 percent decrease in the price leads to a 5 percent increase in the quantity demanded, the price elasticity of demand is
A) 0.30.
B) 0.60.
C) 0.83.
D) 1.20.

Accepted Answer

The answer of If a 6 percent decrease in the...

Question 5

Elasticity measures the
A) percentage change in a variable.
B) slope of a curve.
C) change in a variable.
D) responsiveness of a variable to a change in another variable.

Accepted Answer

Elasticity measures how much one variable responds to changes in another variable, typically expressed as a percentage change.

Question 6

The price elasticity of demand for oil is estimated at 0.05. This value means a 10 percent increase in the
A) quantity of oil demanded will result from a 0.5 percent increase in the price of oil.
B) quantity of oil demanded will result from a 0.5 percent decrease in the price of oil.
C) price of oil will increase the quantity of oil demanded by 0.5 percent.
D) price of oil will decrease the quantity of oil demanded by 0.5 percent.

Accepted Answer

Price elasticity of demand measures the responsiveness of quantity demanded to a change in price. A value of 0.05 indicates that a 10% increase in price will lead to a 0.5% decrease in quantity demanded.

Question 7

The price elasticity of demand measures
A) how often the price of a good changes.
B) the slope of a budget curve.
C) how sensitive the quantity demanded is to changes in demand.
D) the responsiveness of the quantity demanded to changes in price.

Accepted Answer

The price elasticity of demand measures how responsive the quantity demanded of a good is to a change in its price.

Question 8

Suppose the quantity of gasoline is measured in gallons and the price of gasoline is measured in dollars. The price elasticity of demand is 0.67. If the price of gasoline was now measured in cents rather than dollars, the price elasticity of demand would now be
A) 0.0067.
B) 0.67.
C) 6.7.
D) 67.0.

Accepted Answer

Price elasticity of demand is a unitless measure, meaning it does not depend on the units in which price or quantity are measured. Therefore, changing the unit of price from dollars to cents does not affect the elasticity value.

Question 9

Dan sells newspapers. Dan says that a 4 percent increase in the price of a newspaper will decrease the quantity of newspapers demanded by 8 percent. According to Dan, the demand for newspapers is
A) inelastic.
B) unit elastic.
C) perfectly elastic.
D) elastic.

Accepted Answer

The demand is elastic because the percentage change in quantity demanded (8%) is greater than the percentage change in price (4%), indicating that consumers are responsive to price changes.

Question 10

Suppose the price of burgers increases from $2 to $3 each. The degree to which quantity demanded responds to this price increase depends on the
A) price elasticity of demand.
B) the price elasticity of supply.
C) income elasticity of demand.
D) cross elasticity of demand.

Accepted Answer

The price elasticity of demand measures how much the quantity demanded of a good responds to a change in the price of that good.

Question 11

The price elasticity of demand for furniture is estimated at 1.3. This value means a one percent increase in the
A) price of furniture will increase the quantity of furniture demanded by 1.3 percent.
B) price of furniture will decrease the quantity of furniture demanded by 1.3 percent.
C) quantity of furniture demanded will decrease the price of furniture by 1.3 percent.
D) quantity of furniture demanded will increase the price of furniture by 1.3 percent.

Accepted Answer

The price elasticity of demand measures how much the quantity demanded of a good responds to a change in price. A value of 1.3 indicates that a 1% increase in price will lead to a 1.3% decrease in quantity demanded, showing elastic demand.

Question 12

A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is
A) 0.5.
B) 2.0.
C) 10.0.
D) 20.0.

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% / 20% = 0.5.

Question 13

If a 20 percent increase in the price of a used car results in a 10 percent decrease in the quantity of used cars demanded, then the price elasticity of demand equals
A) 0.5.
B) 1.0.
C) 2.0.
D) 10.0.

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% / 20% = -0.5. The absolute value is 0.5.

Question 14

When the quantity of coal is measured in kilograms instead of pounds, the demand for coal becomes
A) more elastic.
B) less elastic.
C) neither more nor less elastic.
D) undefined.

Accepted Answer

The elasticity of demand is a measure of how much the quantity demanded responds to a change in price, not the units in which the quantity is measured. Therefore, changing the unit of measurement from pounds to kilograms does not affect the elasticity of demand.

Question 15

The price elasticity of demand is calculated as the absolute value of the
A) percentage change in quantity demanded divided by the percentage change in price.
B) percentage change in price divided by the percentage change in quantity demanded.
C) change in quantity demanded divided by the change in price.
D) change in price divided by the change in quantity demanded.

Accepted Answer

Price elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in price, and it is often expressed as an absolute value.

Question 16

A 20 percent increase in the quantity of pizza demanded results from a 10 percent decline in its price. The price elasticity of demand for pizza is
A) 0.5.
B) 2.0.
C) 10.0.
D) 20.0.

Accepted Answer

The answer of A 20 percent increase in the quantity...

Question 17

A decrease in the price of eggs from $1.50 to $1.30 per dozen resulted in an increase in egg purchases in two cities. In Philadelphia, daily egg purchases increased from 6000 to 8000 dozens; in nearby Dover, Delaware, daily egg purchases increased from 300 to 400 dozens. The price elasticity of demand is therefore
A) lower in the smaller city as would be expected.
B) greater in the smaller city as would be expected.
C) certainly affected by population differences in different markets.
D) the same in Philadelphia as in Dover.

Accepted Answer

The price elasticity of demand is calculated using the percentage change in quantity demanded divided by the percentage change in price. In both cities, the percentage change in quantity demanded and the percentage change in price are the same, resulting in the same elasticity.

Question 18

The price elasticity of demand equals magnitude of the
A) change in the price divided by the change in quantity demanded.
B) change in the quantity demanded divided by the change in price.
C) percentage change in the price divided by the percentage change in the quantity demanded.
D) percentage change in the quantity demanded divided by the percentage change in the price.

Accepted Answer

Price elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in price.

Question 19

The price elasticity of demand is equal to the ________ in the ________ divided by the ________ in the ________.
A) percentage change; price; percentage change; quantity demanded
B) change; price; change; quantity demanded
C) percentage change; quantity demanded; percentage change; price
D) change; quantity demanded; change; price

Accepted Answer

Price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price.

Question 20

The price elasticity of demand for oranges ________ change if the units of the quantity was changed from pounds to kilograms and ________ change if the units of the price was changed from dollars to cents.
A) would; would
B) would; would not
C) would not; would
D) would not; would not

Accepted Answer

Price elasticity of demand is a unit-free measure, meaning it does not depend on the units of quantity or price. Therefore, changing the units from pounds to kilograms or from dollars to cents would not affect the elasticity.

Quiz 4: Elasticity

The price elasticity of demand depends on

The price elasticity of demand is defined as the magnitude of the

The price elasticity of demand for purses is measured in what units?

If a 6 percent decrease in the price leads to a 5 percent increase in the quantity demanded, the price elasticity of demand is

Elasticity measures the

The price elasticity of demand for oil is estimated at 0.05. This value means a 10 percent increase in the

The price elasticity of demand measures

Suppose the quantity of gasoline is measured in gallons and the price of gasoline is measured in dollars. The price elasticity of demand is 0.67. If the price of gasoline was now measured in cents rather than dollars, the price elasticity of demand would now be

Dan sells newspapers. Dan says that a 4 percent increase in the price of a newspaper will decrease the quantity of newspapers demanded by 8 percent. According to Dan, the demand for newspapers is

Suppose the price of burgers increases from $2 to $3 each. The degree to which quantity demanded responds to this price increase depends on the

The price elasticity of demand for furniture is estimated at 1.3. This value means a one percent increase in the

A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is

If a 20 percent increase in the price of a used car results in a 10 percent decrease in the quantity of used cars demanded, then the price elasticity of demand equals

When the quantity of coal is measured in kilograms instead of pounds, the demand for coal becomes

The price elasticity of demand is calculated as the absolute value of the

A 20 percent increase in the quantity of pizza demanded results from a 10 percent decline in its price. The price elasticity of demand for pizza is

The price elasticity of demand equals magnitude of the

The price elasticity of demand is equal to the in the divided by the in the .

The price elasticity of demand for oranges change if the units of the quantity was changed from pounds to kilograms and change if the units of the price was changed from dollars to cents.