Chapter19

B. horizontal.

A perfectly elastic supply curve is A. vertical. B. horizontal. C. an​ upward-sloping straight line that intersects the origin. D. ​downward-sloping.

B. perfectly elastic.

A supply curve that is parallel to the quantity axis is A. unitary elastic. B. perfectly elastic. C. perfectly inelastic. D. relatively inelastic.

B. Good Y.

The value of the absolute price elasticity of demand for good X is 3. The absolute price elasticity for good Y is 2. Which​ good's quantity demanded is less responsive to a change in​ price? A. Good X. B. Good Y. C. They are equally responsive. D. Not enough information is given

C. 1.

A 10 percent increase in the price of tablets leads to a 10 percent decrease in the quantity demanded of tablets. The absolute price elasticity of demand for tablets is A. 3. B. 10. C. 1. D. 0.3.

D. 1.

A 2 percent increase in the price of rice leads to a 2 percent decrease in the quantity demanded of rice. The absolute price elasticity of demand is A. 6. B. 0.1. C. 3. D. 1.

C. a 10 percent increase in price leads to a 5 percent decrease in quantity demanded.

A value of the absolute price elasticity of demand equal to 0.5 indicates that A. a 0.5 percent increase in price leads to a 1 percent decrease in quantity demanded. B. a 1 percent increase in price leads to a 5 percent decrease in quantity demanded. C. a 10 percent increase in price leads to a 5 percent decrease in quantity demanded. D. a 5 percent increase in price leads to a 10 percent decrease in quantity demanded.

A. a​ 10% increase in price leads to a​ 5% decrease in quantity demanded.

A value of the absolute price elasticity of demand equal to 0.5 indicates that A. a​ 10% increase in price leads to a​ 5% decrease in quantity demanded. B. a​ 1% decrease in price leads to a​ 5% increase in quantity demanded. C. a​ 0.5% increase in price leads to a​ 1% decrease in quantity demanded. D. a​ 2% decrease in price leads to a​ 25% increase in quantity demanded.

C. perfectly inelastic.

A vertical supply curve may be described as being A. relatively elastic. B. perfectly elastic. C. perfectly inelastic. D. relatively inelastic.

B. less than 1.5.

After full adjustment to a price change has​ occurred, the absolute price elasticity of demand for an item is equal to 1.5. In the short​ run, the absolute price elasticity of demand for the item was probably A. less than 0. B. less than 1.5. C. greater than 1.5. D. greater than 0.

C. 5/9

An 36 percent increase in the price of small cars results in a 20 percent increase in the quantity supplied. The supply elasticity in this range equals​ ________.

D. 1 percent decrease in price leads to a 4 percent increase in quantity demanded.

An absolute price elasticity of demand equal to 4 indicates that a A. 10 percent increase in price leads to a 4 percent decrease in quantity demanded. B. 0.4 percent decrease in price leads to a 1 percent increase in quantity demanded. C. 4 percent increase in price leads to a 10 percent decrease in quantity demanded. D. 1 percent decrease in price leads to a 4 percent increase in quantity demanded.

C. a more elastic supply curve.

Changes in technology over time will result in A. a more inelastic supply curve. B. a unitary elastic supply curve. C. a more elastic supply curve. D. no change in the elasticity of supply.

B. elastic.

If a 1 percent increase in price causes a 2 percent increase in quantity​ supplied, then supply is A. inelastic. B. elastic. C. infinite. D. ​unit-elastic.

A. negative.

If milk and cookies are​ complements, then their cross price elasticity of demand will be A. negative. B. positive. C. elastic. D. greater than zero but less than 1.

D. has fallen by 5 percent

If the absolute price elasticity of demand for good X is​ 0.5, when there is a 10 percent increase in​ price, we can conclude that quantity demanded A. has fallen by 50 percent. B. has fallen by 20 percent. C. has fallen by 10 percent. D. has fallen by 5 percent.

C. the market price of good A will result in a​ 2% decrease in the quantity demanded of good A .

If the price elasticity of demand for good A is minus−​2, then a​ 1% increase in A. consumer income will result in a​ 2% increase in the demand for good A. B. the market price of good A will result in a​ 2% increase in the quantity demanded of good A . C. the market price of good A will result in a​ 2% decrease in the quantity demanded of good A . D. consumer income will result in a​ 2% decrease in the demand for good A.

C. greater than one.

If the price elasticity of demand ​(Ep​) equals one in the short​ run, then, other things being​ equal, in the long run Ep will be A. less than one. B. one. C. greater than one. D. indeterminate without more information.

C. Supply for candy is​ inelastic, and price elasticity of supply​ = 0.5.

If the quantity supplied of candy increases by​ 1% when the price of candy increases by​ 2%, which of the following is​ TRUE? A. Supply for candy is​ elastic, and price elasticity of supply​ = 0.5. B. Supply for candy is​ elastic, and price elasticity of supply​ = 2.0. C. Supply for candy is​ inelastic, and price elasticity of supply​ = 0.5. D. Supply for candy is​ inelastic, and price elasticity of supply​ = 2.0.

C. perfectly inelastic

If the quantity supplied stays the same no matter what the price​ is, then supply is A. ​unit-elastic. B. perfectly elastic. C. perfectly inelastic. D. undefined.

A. is more elastic than it is in the short run.

In the long​ run, the supply curve A. is more elastic than it is in the short run. B. exhibits no systematic sequence of changes in elasticity. C. is less elastic than it is in the short run. D. exhibits no change in elasticity at all.

C. 0.5.

OLED television prices rise by 10​ percent, and in response the quantity of those OLED televisions supplied increases by 5 percent. The supply elasticity for OLED television sets in that price range is A. 1.5. B. minus−2.0. C. 0.5. D. 2.0.

D. the ease with which consumers can substitute other goods for that product.

One of the most important determinants of a​ good's price elasticity of demand is A. the cost of producing the good. B. the profits of suppliers. C. the numbers of buyers in the market. D. the ease with which consumers can substitute other goods for that product.

C. the smaller the percentage of a total budget that a family spends on a good.

Other things being​ equal, demand is less elastic A. the more expensive the good is. B. the more substitutes a good has. C. the smaller the percentage of a total budget that a family spends on a good. D. the longer is the time period for adjustment.

C. positive because of the law of supply.

Price elasticity of supply is always A. negative because of the law of supply. B. positive because of diminishing marginal utility. C. positive because of the law of supply. D. negative because percentages can only be negative.

B. perfectly elastic. *Graph*

Refer to the figure at right. The supply curve is A. elastic at high prices and inelastic at low prices. B. perfectly elastic. C. perfectly inelastic. D. unitary for all prices

B.​+1

Refer to the table at right. Suppose the price of B rises from​ $18 to​ $20. What is the cross price elasticity of demand between A and​ B? 이거 몰라 ㅇㅇㅇ A. 0 B.​+1 C. minus−2 D. minus−1

D. a time period lengthens.

Supply will become more elastic when A. the time period shortens. B. the good is important to consumers. C. there are good substitutes for the goods. D. a time period lengthens.

A. minus−2.0.

Suppose that the amount of portable power banks demanded increases by 10 percent when the price of personal computers falls by 5 percent. The cross price elasticity of demand between portable power banks and personal computers is A. minus−2.0. B. 0.5. C. minus−0.5. D. 2.0.

B. complements.

Suppose that the cross price elasticity of demand between good X and good Y is minus−1.55. This indicates that the two goods are A. substitutes. B. complements. C. completely unrelated in the minds of consumers. D. both inferior.

B. Y and Z are substitutes because the cross price elasticity is positive.

Suppose that the cross price elasticity of demand between goods Y and Z equals 1.5. Which of the following is​ TRUE? A. Y and Z are substitutes because the cross price elasticity is less than one. B. Y and Z are substitutes because the cross price elasticity is positive. C. Y and Z are complements because the cross price elasticity is less than one. D. Y and Z are complements because the cross price elasticity is positive.

A. 1.5.

Suppose that the number of units of good A consumed falls 12 percent when the price of good B falls 8 percent. The cross price elasticity of demand between goods A and B is A. 1.5. B. 2.0. C. 1.75. D. 0.66.

B. 1.4.

Suppose that the price of eggs increases from 75 cents to​ $1.00 per dozen and as a result a typical farmer experiences a decrease in egg sales from 300 to 200 dozen per week. Using the method of average​ values, the absolute price elasticity of demand is A. 3.0. B. 1.4. C. 0.8. D. 1.75.

D. 0.3

Suppose that when the price of donuts rises​ 10%, the quantity demanded of donuts falls​ 3%. Based on this​ information, what is the approximate absolute price elasticity of demand for​ donuts? A. 1.3 B. 3.33 C. 30 D. 0.3

C. zero.

Suppose that when the price of good A​ changes, the quantity of good B demanded remains the same. The cross price elasticity of demand is A. negative. B. positive. C. zero. D. either positive or negative.

A. ​complements, with a cross price elasticity of minus−0.5.

Suppose that when the price of root beer rises​ 1%, the quantity of pizza demanded falls​ 0.5%. This would mean that pizza and root beer are A. ​complements, with a cross price elasticity of minus−0.5. B. ​substitutes, with a cross price elasticity of minus−2.0. C. ​substitutes, with a cross price elasticity of 0.5. D. ​complements, with a cross price elasticity of minus−2.0.

A. more elastic in the long run than in the short run.

The demand curve for gasoline should be A. more elastic in the long run than in the short run. B. less elastic in the long run than in the short run. C. as elastic in the long run as it is in the short run. D. more or less elastic in the long run versus the short run depending upon supply conditions.

B. percentage change in quantity demanded divided by percentage change in price.

The formal definition of price elasticity of demand is A. quantity demanded divided by price. B. percentage change in quantity demanded divided by percentage change in price. C. change in quantity demanded divided by change in price. D. quantity demanded multiplied by price and divided by 100.

A. the demand for gasoline was inelastic in the short​ run, but elastic in the long run.

The government raises gasoline taxes as part of the price of gasoline and receives more tax revenues.​ However, after five​ years, the government discovers that revenues from the gasoline tax have declined. This situation would be most likely to occur if A. the demand for gasoline was inelastic in the short​ run, but elastic in the long run. B. the demand for gasoline was perfectly inelastic in both the short run and the long run. C. the​ long-run elasticity of demand was greater than the​ long-run elasticity of supply. D. the​ long-run elasticity of supply was much greater than the​ long-run elasticity of demand.

D. more quantity demanded will change.

The longer any price change lasts over​ time, the A. more quickly quantity demanded will return to its original level. B. longer the​ short-run equilibrium will continue to be the​ short-run equilibrium. C. more difficult it is to alter quantity demanded. D. more quantity demanded will change.

B. elastic.

The longer the time frame​ involved, the more likely it is that the demand will be relatively A. flat. B. elastic. C. inelastic. D. steep.

A. the time period firms have to adjust to the new price.

The most important determinant of the elasticity of supply is A. the time period firms have to adjust to the new price. .B. the proportion of the good in the budget of consumers. C. whether the good is a durable good or a nondurable good. D. the price of the good.

C. cross price elasticity of demand.

The percentage change in the demand for one good divided by the percentage change in the price of a related good is the A. price elasticity of supply. B. price elasticity of demand. C. cross price elasticity of demand. D. income elasticity.

D. always​ negative, but by​ convention, economists typically express the price elasticity of demand as an absolute value

The price elasticity of demand is A. always​ positive, so there is no reason to consider the absolute value of the price elasticity of demand. B. always equal to minus−​1, which by convention economists typically express as an absolute​ value, or 1. C. always equal to​ zero, so there is no reason to consider the absolute value of the price elasticity of demand. D. always​ negative, but by​ convention, economists typically express the price elasticity of demand as an absolute value

B. the responsiveness of the quantity demanded of a good to a changes in the price of the good.

The price elasticity of demand is a measure of A. the quantity demanded of a good at a given price. B. the responsiveness of the quantity demanded of a good to a changes in the price of the good. C. the horizontal shift in the demand curve when the price of a good changes. D. the demand for a product holding prices constant.

D. percentage change in quantity demanded divided by the percentage change in price.

The price elasticity of demand is measured by the A. percentage change in price divided by the percentage change in quantity demanded. B. change in quantity demanded divided by the change in price. C. change in price divided by the change in quantity demanded. D. percentage change in quantity demanded divided by the percentage change in price.

A. salt.

The price elasticity of demand would most likely be the lowest for A. salt. B. Shell gasoline. C. a Toyota sport utility vehicle. D. a house.

C. is the percentage change in quantity supplied divided by the percentage change in price.

The price elasticity of supply A. is always negative. B. does not vary between the long and the short run. C. is the percentage change in quantity supplied divided by the percentage change in price. D. is the slope of the supply curve.

a 150 percent increase in price would increase quantity supplied by 90 percent.

The price elasticity of supply is 6. This means that A. a 10 percent increase in quantity will occur when price increases by 6 percent. B. a 50 percent increase in quantity will occur when price increases by 30 percent. C. a​ $10 increase in price would increase quantity supplied by 60. D. a 150 percent increase in price would increase quantity supplied by 90 percent.

A. very inelastic.

The supply curve for housing in the very short run is likely to be A. very inelastic. B. perfectly elastic. C. very elastic. D. ​unit-elastic elastic.

B. positive.

We expect the price elasticity of supply to be A. zero. B. positive. This is the correct answer.C. negative. D. between minus−1 and​ +1.

B. 2.20.

When price is​ $5 per​ unit, quantity demanded is 12 units. When price is​ $6 per​ unit, quantity demanded is 8 units. The value of the absolute price elasticity of demand is approximately A. 4.00. B. 2.20. C. 1.82. D. 0.36.

B. inelastic.

When the consumer spends less than​ 1% of his income on a​ good, demand will be A. elastic. B. inelastic. C. ​unit-elastic. D. ​elastic, unit-elastic or inelastic depending upon supply.

0.73.

When the price of a soft drink from the campus vending machine was​ $0.60 per​ can, 100 cans were sold each day. After the price increased to​ $0.75 per​ can, sales dropped to 85 cans per day. Over this​ range, the absolute price elasticity of demand for soft drinks was approximately equal to A. 0.60. B. 1.67. C. 0.15. D. 0.73.

D. will be positive.

When two goods are substitutes for each​ other, the cross price elasticity of demand A. may be either positive or negative. B. will be zero. C. will be negative. D. will be positive.

B. tap water

Which of the following goods is most likely to have the lowest price​ elasticity? A. pasta B. tap water C. DVD rentals D. movie tickets

B. the cost to produce the product

Which of the following is NOT a determinant of the price elasticity of​ demand? A. the availability of potential substitutes B. the cost to produce the product C. the share of the budget spent on the item D. the time the consumer has to adjust to the price change

A. the number of producers of the good

Which of the following is NOT a determinant of the price elasticity of​ demand? A. the number of producers of the good B. expenditures on the item as a percentage of a​ consumer's total budget C. the time consumers have to adjust to a price change D. the number of substitutes available to buyers

D. All of the above are correct

Which of the following is a determinant of the price elasticity of demand for an​ item? A. The availability of a close substitute for the item B. The amount of time available to adjust to a change in the price of the item C. The percentage of a consumers budget allocated to expenditures on the item D. All of the above are correct

C. Since the demand curve has a negative​ slope, the price elasticity of demand is negative.

Which of the following statements about demand and price elasticity of demand is​ TRUE? A. Since the demand curve has a positive​ slope, the price elasticity of demand is positive. B. Since the demand curve has a negative​ slope, the price elasticity of demand is positive. C. Since the demand curve has a negative​ slope, the price elasticity of demand is negative. D. Since the demand curve has a positive​ slope, the price elasticity of demand is negative.

B. Price elasticity of supply can never equal 1.

Which of the following statements is​ FALSE? A. A perfectly inelastic supply curve is a vertical line. B. Price elasticity of supply can never equal 1. C. Time is an important consideration in determining supply elasticity. D. A horizontal supply curve is possible.

C. The cost of producing the good

Which of the following would NOT affect a​ good's price elasticity of​ demand? A. The ease of substitution between goods B. The number of substitute goods available C. The cost of producing the good D. The proportion of​ one's budget spent on an item