Question 1

Table 5-9
​ 
-Refer to Table 5-9. Along which of the supply curves does quantity supplied move proportionately more than the price?

Accepted Answer

A)  along supply curve B only
B)  along supply curves B and C
C)  along all three supply curves
D)  None. Quantity supplied moves proportionately less than the price along all of the three supply curves.E) A) and B)
F) A) and C)

Question 2

Drug-interdiction policies that reduce the supply of illegal drugs

Accepted Answer

A)  are likely to be more effective in the short run than in the long run.
B)  are proven to reduce illegal drug use faster than drug-education programs designed to reduce demand.
C)  may increase drug-related crimes.
D)  All of the above are correct.E) B) and D)
F) A) and B)

Question 3

For which of the following goods is the income elasticity of demand likely lowest?

Accepted Answer

A)  water
B)  sapphire pendant necklaces
C)  filet mignon steaks
D)  fresh fruitE) A) and D)
F) A) and C)

Question 4

Suppose the price of apples decreases from $1.00 to $0.80 each and, as a result, the quantity of apples demanded increases from 800 to 1,000. Using the midpoint method, the price elasticity of demand for apples in the given price range is

Accepted Answer

A)  0.22.
B)  0.5.
C)  1.0.
D)  4.5.E) A) and C)
F) B) and C)

Question 5

Figure 5-16 
-Refer to Figure 5-16. Using the midpoint method, what is the price elasticity of supply between $6 and $8?

Accepted Answer

A)  0.86
B)  1.00
C)  1.17
D)  1.25E) B) and C)
F) A) and B)

Question 6

Suppose the price of gas increases by 20%. Will demand be more elastic if consumers have 3 weeks or 3 years to adjust to this price change?

Accepted Answer

The answer of Suppose the price of gas increases by...

Question 7

Cross-price elasticity of demand measures how

Accepted Answer

A)  the price of one good changes in response to a change in the price of another good.
B)  the quantity demanded of one good changes in response to a change in the quantity demanded of another good.
C)  the quantity demanded of one good changes in response to a change in the price of another good.
D)  strongly normal or inferior a good is.E) B) and D)
F) None of the above

Question 8

On a certain supply curve, one point is (quantity supplied = 200, price = $2.00)  and another point is (quantity supplied = 250, price = $2.50) . Using the midpoint method, the price elasticity of supply is about

Accepted Answer

A)  0.2.
B)  0.5.
C)  1.0.
D)  2.5.E) B) and C)
F) A) and D)

Question 9

Figure 5-4 
-Refer to Figure 5-4. Assume the section of the demand curve from A to B corresponds to prices between $6 and $12. Then, when the price increases from $8 to $10,

Accepted Answer

A)  the percent decrease in the quantity demanded exceeds the percent increase in the price.
B)  the percent increase in the price exceeds the percent decrease in the quantity demanded.
C)  sellers' total revenue increases as a result.
D)  it is possible that the quantity demanded fell from 550 to 500 as a result.E) C) and D)
F) A) and B)

Question 10

Table 5-1 
-Refer to Table 5-1. Which of the following is consistent with the elasticities given in Table 5-1?

Accepted Answer

A)  A is pens and B is pencils.
B)  A is a Snickers bar and B is a Milky Way bar.
C)  A is an airline ticket from Chicago to New York demanded by a vacationer and B is an airline ticket from Chicago to New York demanded by a business traveler.
D)  A is a bottle of water demanded by a tourist in a desert and B is a bottle of water demanded by a tourist in a rain forest.E) A) and B)
F) A) and D)

Question 11

With regard to elasticity, if a firm has a longer time to adjust to a price increase, supply will be more

Accepted Answer

The answer of With regard to elasticity, if a firm...

Question 12

Generally, a firm is more willing and able to increase quantity supplied in response to a price change when

Accepted Answer

A)  the relevant time period is short rather than long.
B)  the relevant time period is long rather than short.
C)  supply is inelastic.
D)  the firm is experiencing capacity problems.E) B) and D)
F) B) and C)

Question 13

At price of $1.25, a paper manufacturer is willing to supply 150 spiral notebooks per day. At a price of $1.50, the paper manufacturer is willing to supply 175 spiral notebooks per day. Using the midpoint method, the price elasticity of supply is about

Accepted Answer

A)  1.18.
B)  1.00.
C)  0.85.
D)  0.25.E) A) and D)
F) A) and B)

Question 14

An advantage of using the midpoint method to calculate the price elasticity of demand is that it uses the metric system.

Accepted Answer

A) True 
 B)False

Question 15

Knowing that the demand for wheat is inelastic, if all farmers voluntarily did not plant wheat on 10 percent of their land, then

Accepted Answer

A)  consumers of wheat would buy more wheat.
B)  wheat farmers would suffer a reduction in their total revenue.
C)  wheat farmers would experience an increase in their total revenue.
D)  the demand for wheat would decrease.E) A) and D)
F) A) and B)

Question 16

Cross-price elasticity is used to determine whether goods are inferior or normal goods.

Accepted Answer

A) True 
 B)False

Question 17

Figure 5-15 
-Refer to Figure 5-15. Along which of these segments of the supply curve is supply least elastic?

Accepted Answer

A)  GH
B)  CD
C)  AC
D)  ABE) None of the above
F) A) and D)

Question 18

A "Just Say No" drug education policy that successfully educates consumers to reduce their demand for drugs will lower drug prices and reduce the quantity of drugs demanded.

Accepted Answer

A) True 
 B)False

Question 19

Suppose the price elasticity of supply for cheese is 0.6 in the short run and 1.4 in the long run. If an increase in the demand for cheese causes the price of cheese to increase by 15%, then the quantity supplied of cheese will increase by

Accepted Answer

A)  0.4% in the short run and 4.6% in the long run.
B)  1.7% in the short run and 0.7% in the long run.
C)  9% in the short run and 21% in the long run.
D)  25% in the short run and 10.7% in the long run.E) B) and D)
F) C) and D)

Question 20

Figure 5-18 
-Refer to Figure 5-18. Using the midpoint method, what is the price elasticity of supply between $5 and $6?

Accepted Answer

A)  0.60
B)  0.64
C)  1.57
D)  1.67E) All of the above
F) B) and C)

Exam 5: Elasticity and Its Application

With regard to elasticity, if a firm has a longer time to adjust to a price increase, supply will be more

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At price of $1.25, a paper manufacturer is willing to supply 150 spiral notebooks per day. At a price of $1.50, the paper manufacturer is willing to supply 175 spiral notebooks per day. Using the midpoint method, the price elasticity of supply is about

Correct AnswerverifiedShow Answer

Figure 5-15 -Refer to Figure 5-15. Along which of these segments of the supply curve is supply least elastic?

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Suppose the price of gas increases by 20%. Will demand be more elastic if consumers have 3 weeks or 3 years to adjust to this price change?

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Figure 5-16 -Refer to Figure 5-16. Using the midpoint method, what is the price elasticity of supply between $6 and $8?

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Cross-price elasticity of demand measures how

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Table 5-9 ​ -Refer to Table 5-9. Along which of the supply curves does quantity supplied move proportionately more than the price?

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For which of the following goods is the income elasticity of demand likely lowest?

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Suppose the price of apples decreases from $1.00 to $0.80 each and, as a result, the quantity of apples demanded increases from 800 to 1,000. Using the midpoint method, the price elasticity of demand for apples in the given price range is

Correct AnswerverifiedShow Answer

Cross-price elasticity is used to determine whether goods are inferior or normal goods.

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Figure 5-4 -Refer to Figure 5-4. Assume the section of the demand curve from A to B corresponds to prices between $6 and $12. Then, when the price increases from $8 to $10,

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An advantage of using the midpoint method to calculate the price elasticity of demand is that it uses the metric system.

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On a certain supply curve, one point is (quantity supplied = 200, price = $2.00) and another point is (quantity supplied = 250, price = $2.50) . Using the midpoint method, the price elasticity of supply is about

Correct AnswerverifiedShow Answer

Figure 5-18 -Refer to Figure 5-18. Using the midpoint method, what is the price elasticity of supply between $5 and $6?

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Table 5-1 -Refer to Table 5-1. Which of the following is consistent with the elasticities given in Table 5-1?

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A "Just Say No" drug education policy that successfully educates consumers to reduce their demand for drugs will lower drug prices and reduce the quantity of drugs demanded.

Correct AnswerverifiedShow Answer

Suppose the price elasticity of supply for cheese is 0.6 in the short run and 1.4 in the long run. If an increase in the demand for cheese causes the price of cheese to increase by 15%, then the quantity supplied of cheese will increase by

Correct AnswerverifiedShow Answer

Generally, a firm is more willing and able to increase quantity supplied in response to a price change when

Correct AnswerverifiedShow Answer

Drug-interdiction policies that reduce the supply of illegal drugs

Correct AnswerverifiedShow Answer

Knowing that the demand for wheat is inelastic, if all farmers voluntarily did not plant wheat on 10 percent of their land, then

Correct AnswerverifiedShow Answer

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Table 5-9 -Refer to Table 5-9. Along which of the supply curves does quantity supplied move proportionately more than the price?

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