Question 1

A given change in oil supply will result in a smaller change in the equilibrium price of oil if the
A)price elasticity of demand for oil is higher.
B)price elasticity of demand for oil is lower.
C)income elasticity for oil is higher.
D)income elasticity for oil is lower.
E)demand for oil is not sensitive to the price of oil.

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 2

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 3

For a given reduction in the supply of oil,the equilibrium price of oil will
A)decrease by a larger amount for a higher price elasticity of demand.
B)decrease by a smaller amount for a higher price elasticity of demand.
C)increase by a larger amount for a higher price elasticity of demand.
D)increase by a smaller amount for a higher price elasticity of demand.
E)not change,regardless of the price elasticity of demand.

Accepted Answer

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

Question 4

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 5

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

Accepted Answer

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

Question 6

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 7

The concept of price elasticity of demand makes it possible to
A)predict how much demand will shift with a change in price.
B)predict how much price will change with a change in demand.
C)predict how much price will change with a change in supply.
D)predict how much supply will shift with a change in price.
E)anticipate shifts in demand.

Accepted Answer

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

Question 8

If the demand for bananas has a high price elasticity,then a 5 percent decrease in the price of bananas will result in
A)a more than 5 percent increase in the quantity demanded.
B)a less than 5 percent increase in the quantity demanded.
C)no change in the quantity demanded.
D)a more than 5 percent decrease in the quantity demanded.
E)a less than 5 percent decrease in the quantity demanded.

Accepted Answer

If the demand for bananas has a high price elasticity, then a small decrease in the price will lead to a proportionally larger increase in the quantity demanded. This is because consumers are highly responsive to changes in price when the good is highly elastic. Therefore, a 5 percent decrease in price will result in more than a 5 percent increase in the quantity demanded.

Question 9

By knowing how much quantity demanded changes for a given change in price,we can also know
A)exactly which individuals will or will not continue to buy a good whose price has increased.
B)how much quantity supplied changes for a given change in price.
C)how much price changes when the amount of a good available for sale changes.
D)how much supply changes for a given change in price.
E)how much demand changes for a given change in price.

Accepted Answer

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

Question 10

Assume that the price elasticity of demand equals .2 (e_d = .2).Given a 10 percent increase in price,there will be a A)20 percent increase in the quantity demanded. B)2 percent decrease in the quantity demanded. C)20 percent decrease in the quantity demanded. D)2 percent increase in the quantity demanded. E).2 percent decrease in the quantity demanded.

Accepted Answer

Price elasticity of demand of 0.2 means that for every 1% increase in price, quantity demanded decreases by 0.2%. Therefore, a 10% increase in price results in a 2% decrease in quantity demanded.

Question 11

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 low price...

Question 12

If the price elasticity of demand is equal to 4,a 1 percent increase in price will cause the quantity demanded to ____ by ____ percent.
A)decrease; 25
B)increase; 4
C)decrease; 1/4
D)decrease; 4
E)increase; 1/4

Accepted Answer

The price elasticity of demand measures the responsiveness of quantity demanded to a change in price. A price elasticity of demand of 4 indicates that a 1% increase in price will cause a 4% decrease in quantity demanded. Therefore, the answer is D - decrease by 4%.

Question 13

Suppose that the government imposes a sales tax on the consumption of natural gas,which of the following would have the least impact on the producers of natural gas?
A)Perfectly elastic demand
B)Perfectly inelastic demand
C)Unitary elastic demand
D)Zero demand
E)Plastic is an inferior good.

Accepted Answer

When demand is perfectly inelastic, consumers will continue to purchase natural gas even if the price increases due to the tax. This means that the producers of natural gas will not be negatively impacted as their sales will remain steady.

Question 14

To say that gasoline has a low price elasticity of demand is to say the quantity demanded of gasoline
A)has a relatively flat demand curve.
B)has a horizontal demand curve.
C)is not sensitive to changes in gasoline prices.
D)is very sensitive to changes in gasoline prices.
E)is very sensitive to changes in consumer income.

Accepted Answer

A low price elasticity of demand means that the quantity demanded is not very sensitive to changes in price. Therefore, option C is the correct choice. Options A, B, and D are all characteristics of goods with high price elasticity of demand. Option E is not relevant to the concept of price elasticity of demand.

Question 15

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 price elasticity of demand measures the responsiveness of quantity demanded to a change in price, and a higher elasticity means a greater change in quantity demanded for a given change in price. Therefore, understanding the size of the price elasticity of demand is important in determining how much market price will change in response to a shift in supply.

Question 16

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 price elasticity of demand measures how responsive consumers are to changes in price. A high elasticity means that a small change in price leads to a large change in quantity demanded, while a low elasticity means that a change in price has little effect on quantity demanded. Knowing the elasticity is important for firms when making pricing decisions, as it helps them determine how much they can raise or lower the price without losing too many customers. It also helps in predicting the extent to which a shift in supply will affect the market price.

Question 17

The price elasticity of demand is expressed as the
A)percentage change in the quantity demanded divided by the percentage change in income.
B)percentage change in the price divided by the percentage change in the quantity demanded.
C)percentage change in the quantity demanded divided by the percentage change in the price.
D)percentage change in supply divided by the percentage change in demand.
E)absolute change in the quantity demanded divided by the absolute change in the price.

Accepted Answer

The price elasticity of demand is calculated by dividing the percentage change in the quantity demanded by the percentage change in price. This formula helps determine how much the quantity demanded changes in response to a change in price.

Question 18

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

This is because a higher price elasticity of demand means that consumers are more responsive to changes in price, and therefore a given percentage increase in price will lead to a relatively larger percentage decrease in the quantity demanded for that good.

Question 19

Which of the following formulas is a correct expression of the price elasticity of demand?
A) 
B) 
C) 
D) 
E)

Accepted Answer

The answer of Which of the following formulas is a...

Question 20

The price elasticity of demand measures
A)a buyer's responsiveness to a change in income.
B)a buyer's responsiveness to a change in price.
C)a seller's responsiveness to a change in demand.
D)how much price increases for a change in demand.
E)how much demand changes for a change in supply.

Accepted Answer

The price elasticity of demand measures how much the quantity demanded of a good will change in response to a change in its price. Therefore, it measures a buyer's responsiveness to a change in price.

Quiz 4: Subtleties of the Supply and Demand Model: Price Floors,price Ceilings,and Elasticity

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

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

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

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 demand.What does it tell us?

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.

The concept of price elasticity of demand makes it possible to

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

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

Assume that the price elasticity of demand equals .2 (e_d = .2) .Given a 10 percent increase in price,there will be a

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.

If the price elasticity of demand is equal to 4,a 1 percent increase in price will cause the quantity demanded to by percent.

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

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

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 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 is expressed as the

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.

Which of the following formulas is a correct expression of the price elasticity of demand?

The price elasticity of demand measures

Quiz 4: Subtleties of the Supply and Demand Model: Price Floors,price Ceilings,and Elasticity

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

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

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

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 demand.What does it tell us?

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.

The concept of price elasticity of demand makes it possible to

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

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

Assume that the price elasticity of demand equals .2 (ed = .2) .Given a 10 percent increase in price,there will be a

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.

If the price elasticity of demand is equal to 4,a 1 percent increase in price will cause the quantity demanded to ____ by ____ percent.

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

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

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 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 is expressed as the

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.

Which of the following formulas is a correct expression of the price elasticity of demand?

The price elasticity of demand measures

Assume that the price elasticity of demand equals .2 (e_d = .2) .Given a 10 percent increase in price,there will be a

If the price elasticity of demand is equal to 4,a 1 percent increase in price will cause the quantity demanded to by percent.