ECON 201 HW 3

Suppose that a tax is placed on textbooks. If the buyers end up bearing most of the tax burden, this indicates that the A) demand is more inelastic than the supply B) supply is more inelastic than the demand C) government has required that the buyers remit the tax payments D) government has required that sellers remit the tax payments

A) demand is more inelastic than the supply

When demand is price inelastic, A) price and total revenue move in the same direction B) price and total revenue move in the opposite direction C) total revenue increases whether price goes up or down D) total revenue decreases whether price goes up or down

A) price and total revenue move in the same direction

Other things equal, the demand for a good tends to be more inelastic A) the fewer the available substitutes B) the longer the time period considered C) the more the good is considered a luxury good D) the more narrowly defined is the market for the good

A) the fewer the available substitues

If a demand curve for a good were completely vertical, it would be considered A) perfectly elastic B) perfectly inelastic C) of unitary elasticity D) relatively inelastic

B) perfectly inelastic

If the price of apples increases, total expenditures on apples will decline if A) the demand of apples is inelastic B) the demand for apples is elastic C) the quantity of apples purchased is unresponsive to change in price D) there are few good substitutes for apples

B) the demand for apples is elastic

All things equal, the price elasticity of supply A) will be greater in the short run than in the long run B) will be greater in the long run than in the short run C) is the same for the short run and the long run D) approaches zero in the long run

B) will be greater in the long run than in the short run

When the price of Nike tennis shoes goes from $100 to $80, the quantity demanded increases from 20 to 30 million. Over this price range the absolute value of the price elasticity of demand is A) 0.55 B) 1 C) 1.25 D) 1.80

D) 1.80

The greater the price in 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) greater the responsiveness of quantity demanded to a change in price