ECON 201 TEST 3

A good that takes up a very large percentage of the consumer's budget will tend to have a. an elastic demand. b. a perfectly elastic demand. c. an inelastic demand. d. an upward-sloping demand curve. e. very many substitutes.

a

If consumers would be willing to purchase the same quantity of a good no matter what its price was, the demand curve would a. be a vertical line,Êindicating thatÊdemand is perfectly inelastic. b. be a horizontal line, and the demand would be perfectly elastic. c. not exist. d. be identical to the supply curve for the good.

a

Of the following goods, which is most likely to have the lowest (most inelastic) elasticity of demand? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a coffee b Chevrolet automobiles c fresh tomatoes d provolone cheese

a

A successful advertising campaign would likely a. increase price elasticity of demand by stressing the uniqueness of the product. b. reduce price elasticity of demand by stressing the uniqueness of the product. c. reduce price elasticity of demand by informing consumers of the availability of substitutes. d. not alter the demand curve. e. generally make the demand curve shift inward.

b

Holding all other forces constant, when the price of gasoline rises, the number of gallons of gasoline demanded would fall substantially over a ten-year period because a. buyers tend to be much less sensitive to a change in price when given more time to react. b. buyers tend to be much more sensitive to a change in price when given more time to react. c. buyers will have substantially more income over a ten-year period. d. the quantity supplied of gasoline increases very little in response to an increase in the price of gasoline.

b

If you compared the short-run demand and long-run demand for education at your WVU, you would almost certainly find that a.the long-run demand curve was steeper than the short-run demand curve. b, a tuition increase would reduce enrollment more in the long run than in the short run. c. a reduction in tuition would increase enrollment in the short run but not in the long run. d. the short-run and long-run demand curves were identical.

b

The demand for which one of the following is most likely to be highly elastic? a. gasoline b. fresh green spinach c. tickets to the Super Bowl football game d. the services of a physician

b

Along the inelastic portion of a demand curve, a. the change in price will always be less than the change in quantity demanded. b. the percentage change in price will be less than the percentage change in quantity demanded. c. the change in price will always be more than the change in quantity demanded. d.the percentage change in price will be more than the percentage change in quantity demanded.

d

For which one of the following goods would you expect the demand to be most elastic? a. Sheetz gasoline b. BP gasoline c. gasoline d. a and b

d

In heavily Catholic cities like Cincinnati, which of the following goods is likely to have more inelastic demand compared to cities with few Catholics a. Tacos b. Fish c. Asparagus d. Rutabaga

b.fish

For which one of the following goods would you expect the demand to be most elastic? a. salt b. gasoline, short run c. automobiles d. Chevrolet automobiles

d

For which one of the following goods would you expect the demand to be most inelastic? a. Taco Bell b. Taco Johns c. Chipotle d. Tacos

d

The price elasticity of demand for gasoline measures the a. responsiveness of gasoline producers to changes in the quality of gasoline. b. responsiveness of customers to changes in the price of gasoline. c. responsiveness of consumer preferences to changes in the quality of gasoline. d. both a and c above.

b

Demand will be more inelastic, a. the shorter the time the consumer has to adjust to price changes. b. the higher the price of the good. c. the more the number of good substitutes. d. the less essential the consumption of the good.

a

The price elasticity of demand for a product tends to be large (more elastic) when a. people spend a large share of their income on the product. b. the population in the market area is small. c. few good substitutes for the product are available. d. many complementary products are available.

a

If a large percentage increase in the price of a good results in a small percentage reduction in the quantity demanded of the good, demand is said to be a. of unitary elasticity. b. relatively inelastic. c. relatively elastic. d. perfectly elastic.

b

The price elasticity of demand for a commodity is determined primarily by the a. size of the consumer surplus. b. attractiveness of the substitutes for the good. c. incomes of consumers. d. availability of complementary goods.

b

The figure above depicts a demand curve with a price elasticity that is a. perfectly elastic, implying that as much as can be supplied will be purchased at the market price. b.relatively inelastic, implying that a percent increase in price results in a smaller percent reduction in sales. c. unitary, implying that a percent change in price leads to an equal percent change in quantity demanded. d. perfectly inelastic, implying that the same amount will be purchased regardless of the price of the good.

d

The greater the price elasticity of demand, the a. more likely the product is a necessity. b. smaller the responsiveness of quantity demanded to a change in price. c.greater the percentage change in price over the percentage change in quantity demanded. d. greater the responsiveness of quantity demanded to a change in price.

d

When economists say the demand for a good is highly inelastic, they mean that a. even if the price rose substantially, suppliers would be unwilling to offer much more of the good. b. the facilities utilized by producers of the good are inflexible; producers cannot easily expand their facilities, even in the long run . c. consumers will respond to a change in the price of the good by purchasing substantially more of it. d. a large (percentage) change in the price of a good will result in only a small (percentage) change in the quantity demanded.

d

Which of the following is true regarding the price elasticity of demand? a. Demand is generally more elastic in the long run than in the short run. b. Along a single demand curve, demand elasticity decreases as you move down the curve (to lower prices). c. A demand curve that is flatter (has a less steep slope) is relatively more elastic than a demand curve that has a steeper slope. d. All of the above are true.

d

he more broadly a good is defined, a. the more substitutes it has so the more elastic is its demand. b. the fewer substitutes it has so the more elastic is its demand. c. the more substitutes it has so the less elastic is its demand. d. the fewer substitutes it has so the less elastic is its demand.

d

Which one of the following goods would likely have the most inelastic demand? a Kellogg's corn flakes b salt c a new Toyota automobile d fresh green beans

b

Why do economists use the concept of elasticity in addition to measurement of the slope of the demand curve? a. Mathematical equations are favored over graphical analysis. b. Elasticities are independent of the units of measure. c. The concept of elasticity can be used in other areas of economics, whereas the slope of the demand curve is only useful in demand analysis. d. These terms are interchangeable, but elasticity has the more professional sound.

b

Compared to the long run, consumers typically ___ to price changes in the short run. a. are very responsive b. are more demand sensitive c. are less demand sensitive d. do not respond at all

c

Demand will be more elastic, a. the shorter the time the consumer has to adjust to price changes. b. the lower the price of the good. c. the larger the number of good substitutes. d. the more essential the consumption of the good.

c

The demand for which one of the following is most likely to be highly inelastic? a. fresh green beans b. Old Navy brand shirts c. health-care services d. haircutting services

c

The demand curve for a good is very unlikely to be perfectly vertical because a. scarcity and limited income restrict the ability of consumers to afford goods as they become very expensive. b. as the price of a good rises to high enough levels, the incentive for other suppliers to invent new substitutes for the good increases. c. consumers generally do not care about the price of the goods they consume. d. both a and b are true.

d

The demand for which one of the following goods is most likely to be quite inelastic? a. fresh green peas b. provolone cheese c. General Electric television sets d. A defense lawyer

d

The demand for which one of the following will be most inelastic? a. black-eyed peas b. peas c. vegetables d. food products

d