Econ 1: Chapter 6
C
If a firm can sell 3,000 units of product A at $10 per unit and 5,000 at $8, then: A. The price elasticity of demand is 0.44 B. A is a complementary good C. The price elasticity of demand is 2.25 D. A is an inferior good
D
If a firm finds that it can sell $13,000 worth of a product when its price is $5 per unit and $11,000 worth of it when its price is $6, then: A. The demand for the product is elastic in the $6-$5 price range B. The demand for the product must have increased C. Elasticity of demand is 0.74 D. The demand for the product is inelastic in the $6-$5 price range
C
If the price elasticity of demand for gasoline is 0.20: A. The demand for gasoline is linear B. A rise in the price of gasoline will reduce total revenue C. A 10 percent rise in the price of gasoline will decrease the amount purchased by 2 percent D. A 10 percent fall in the price of gasoline will increase the amount purchased by 20 percent
A
Refer to the above data. Which of the following is correct? A. Although the slope of the demand curve is constant, price elasticity declines as we move from high to low price ranges B. Although the slope of the demand curve is constant, price elasticity increases as we move from high to low price ranges
C
Refer to the above info and assume the stadium capacity of 5,000. If the Mud hen's management charges $7 per ticket: A. Some fans who want to see the game will find that tickets are not available B. There will be 2,000 empty seats C. There will be 1,000 empty seats D. The game will be sold out
D
Refer to the table above. Over the $6-$4 price range, supply is: A. Perfectly Elastic B. Elastic C. Perfectly Inelastic D. Inelastic
B
Suppose the price of local cable TV service increased from $16.20 to $19.80 and as a result the number of cable subscribers decreased from 224,000 to 176,000. Along this portion of the demand curve, price elasticity of demand is: A. 0.8 B. 1.2 C. 1.6 D. 8.0
D
The demand for a luxury good whose purchase would exhaust a significant portion of one's income is: A. Perfectly inelastic B. Perfectly Elastic C. Relatively inelastic D. Relatively elastic
B
The price elasticity of demand for beef is about 0.60. Other things equal, this means that a 20 percent increase in the price of beef will cause the quantity of beef demanded to: A. Increase by approx 12 percent B. Decrease by approx 12 percent C. Decrease by approx 32 percent D. Decrease by approx 26 percent
D
The price of product X is reduced from $100 to $90 and, as a result, the quantity demanded increases from 50 to 60 units. Therefore demand for X in this price range: A. Has declined B. Is of unit elasticity C. Is inelastic D. Is elastic
B
Which of the following generalizations is NOT correct? A. The larger an item is in one's budget, the greater the price elasticity of demand B. The price elasticity of demand is greater for necessities than it is for luxuries C. The larger the number of close substitutes available, the greater will be the price elasticity of demand for a particular product D. The price elasticity of demand is greater the longer the time period under consideration
C
Which of the following statements is correct? A. Supply is more elastic in the short run than in the long run B. Demand is more elastic in the short run than in the long run C. Demand is more elastic when a large number of substitute goods are available D. Supply is more elastic when there are a small number of producers in the industry