Ch. 5
The price elasticity of demand shows the sensitivity of consumers' purchases to a What change in the good's price.
%
In the market for sneakers, suppose Green's price elasticity of demand is 0.2, Smith's price elasticity is 1.2, and the price elasticity of all the other consumers is greater than 0.2 but less than 1.2. Could the market price elasticity be less than 0.2 or greater than 1.2? A. No, it must lie between 0.2 and 1.2. B. Yes, it can be a multiple or fraction of the average of the elasticities of individual consumers.
A
The demand curve shows ___________. Part 2 A. how the quantity demanded responds to changes in the price of the good. B. how the quantity demanded responds to changes in consumers' income. C. the possible bundles of goods that can be purchased with a consumer's income. D. what goods you like compared to other goods and services.
A
Which of the following are necessary ingredients to the buyer's problem? (Check all that apply.) Part 2 A. Prices of goods and services. B. Consumer's tastes and preferences. . C. Amount of money the consumer has to spend. D. Consumer's ability to discern product usefulness. E. Employment status of the consumer.
ABC
Which of the following shows the arc elasticity method of calculating the price elasticity of demand? A. P2-P1/(P1+P2)/2/Q2-Q1/(Q2+Q1)/2 B. Q2-Q1/(Q2+Q1)/2/P2-P1/(P2+P1)/2
B
Given that bacon and eggs are complementary goods, if the price of eggs increases the demand for both goods will fall. Is this an accurate statement? Part 2 A. It is somewhat inaccurate. The increase in the price of eggs will reduce the quantity demanded (not the demand) for bacon. It will, however, as the statement claims, reduce the demand for eggs. B. Yes, the increase in the price of eggs will reduce both the demand for eggs and the demand for bacon. C. It is somewhat inaccurate. The increase in the price of eggs will reduce the quantity demanded (not the demand) for eggs. It will, however, as the statement claims, reduce the demand for bacon. D. No, the quantity demanded (not the demand) for both goods is reduced as a result of the increase in the price of eggs.
C
Charley spends all of his income on soft drinks and pizza. Suppose he is currently buying these products in amounts such that his marginal benefit from an additional soft drink is $110 and his marginal benefit from an additional slice of pizza is $140. If the price of a soft drink is $3 and the price of a slice of pizza is $6, is Charley maximizing his total benefits? Part 2 A. Yes, there is no other consumption choice that will make his total benefits greater. B. No, he should increase his consumption of both goods. C. No, he should shift consumption toward pizza and away from soft drinks to maximize total benefits. D. No, he should shift consumption toward soft drinks and away from pizza to maximize total benefits.
D
Everything else the same, as the price of the good increases, quantity demanded
Decreases
