ch5 econ quiz

When the price of hamburgers changed from $1.50 to $2.75, the quantity demanded changed from 375 to 250. Using the midpoint method, hamburgers are said to be:

inelastic

Home heating gas tends to have ____ demand because _____.

inelastic; people do not have time to adjust their consumption patterns

tax in which the percentage of income tax rises as income falls is known as a:

regressive tax.

Suppose the demand for toxic waste disposal is very elastic. The government imposes an excise tax on waste disposal. The deadweight loss associated with the production of toxic waste disposal will be:

relatively large.

Which of the following is the price elasticity of demand if price increases by 100% and quantity demanded decreases by 50%?

0.5

When a product's price changes from $26 to $10 and its quantity supplied changes from 200 to 100 units, the price elasticity of supply (using the midpoint method) equals:

0.75

When the price of coffee changed from $4.50 to $5.55, the quantity demanded changed from 185 to 150. Using the midpoint method, the price elasticity of demand is:

1

If a product's price rises by 6%, and its quantity demanded falls by 8%, then its elasticity is calculated to be:

1.33

The price of gold increases by 200%. If the price elasticity of demand of gold is 0.4, what will happen in the market?

Gold sales will decrease by 80%.

If a store deals in a good that has a unitary elastic demand, what would be the net results on their total revenue of an increase in price?

There would be no change in total revenue.

Alvaro pays $40 in tax on a $120 item. Nurul pays $80 on a $240 item. We can conclude that this tax is a:

a flat tax.

If ED = 4, then:

a price increase of 1% will reduce quantity demanded by 4%.

If demand is inelastic, the tax burden falls primarily on the _____ and deadweight loss is _____.

buyer;small

If the price of a product falls by 15%, and the quantity supplied falls by 25%, we can say that the elasticity of supply is:

elastic

The percentage of the household budget spent on pencils is less than 1%, while that spent on housing expenses is about 40%. If the price of both goods increased by 10%, the:

elasticity of demand for housing would exceed that for pencils.

A firm increases price and total revenues increase. From this we can conclude that its demand:

is price inelastic.

In which period can firms decide to leave an industry?

long run

If income increases by 12% and the quantity demanded of a good increases by 14%, the good is a(n) ______ good.

luxury

In general, the flatter the supply curve is, the:

more elastic is supply

If the cross elasticity of demand for good A with respect to good B is 2.3, then good A is a(n):

sub for good b

When moving down along a straight-line demand curve:

the elasticity of demand changes from elastic to inelastic.

The primary determinant of the elasticity of supply is:

time

If a firm sells a product that has a perfectly inelastic demand curve, then, if price doubles, it can be expected that:

total rev will double

A gas station owner in a large city learned in his microeconomics class that buyers are relatively unresponsive to changes in the price of gasoline. If, based on that assumption, he increases the price of gas at his station:

total revenue will increase.