Econ - Elasticity

Which of the following goods or services is more likely to be price inelastic? Multiple choice question. Dining out An appendectomy Vacation travel A candy bar

An appendectomy

When an increase or decrease in price does not change total revenue, demand is elastic.

Blank 1: unit or unitary

How is a buyer's responsiveness to price changes measured?

By the price elasticity of demand coefficient

Supply is perfectly inelastic during the ______. Multiple choice question. short run long run total-revenue period immediate market period

immediate market period

The inelastic nature of farm products means that the increased output brought about by a good growing season results in which of the following? Multiple select question. Depressed total revenue Decreased prices Increased prices Surplus total revenue

Depressed total revenue Decreased prices

Which of the following typically varies over the different price ranges of the same demand curve? Multiple choice question. Tastes of consumers Prices of related goods Elasticity Nature of the good

Elasticity

Which of the following is true of the coefficient of price elasticity of demand as price increases along a linear demand curve? Multiple choice question. It stays the same. It reaches zero. It declines. It increases.

It increases. Reason: Moving along the demand curve from higher to lower prices, the price elasticity of demand declines because the percentage change in price becomes greater than the percentage change in quantity demanded.

For a consumer with a household income of $50,000, which item would have the greatest price elasticity of demand? Multiple choice question. Pizza New car Movie ticket Smartphone

New car

With price elasticity of supply, the supply curve slopes upward because of the positive relationship between which of the following? Multiple choice question. Supply and demand Price and amount supplied Price and amount demanded Price and total revenue

Price and amount supplied

Which of the following products would be price elastic based on their substitutability? Multiple choice question. Tooth repair Corrective lenses Salt Snickers candy bar

Snickers candy bar

Which item, when purchased new, would have the lowest price elasticity of demand? Multiple choice question. Laptop Smartwatch Socks Television

Socks

Which of the following is a determinant of the price elasticity of demand? Multiple choice question. Proportion of demand Substitutability Price Supply levels

Substitutability

Excise taxes are levied on which of the following? Multiple select question. The quantity of products sold The production of specific products Products imported as raw materials Products with a low elasticity of demand

The quantity of products sold The production of specific products Products with a low elasticity of demand

The cross-price elasticity of demand measures which of the following?

The responsiveness of consumer purchases of one product due to a change in the price of some other product

True or false: When considering the price elasticity of supply, price and total revenue always move together.

True

Economists typically express the elasticity coefficient as an absolute value in order to ______.

avoid ambiguity

Calculating the percentage change in quantity demanded for a given product involves dividing the ______ by the ______.

change in quantity demanded; original quantity demanded

To calculate the ______, take the percentage change in quantity demanded of product X and divide by the percentage change in the price of product Y.

coefficient for the cross-price elasticity of demand

Product ______ should be considered when discussing time as a determinant of price elasticity of demand. Multiple choice question. accessibility durability price availability

durability

The demand for Reebok sneakers is relatively price_______________

elastic

Restaurant meals, smart watches, and concert tickets are all examples of goods that exhibit a high price _________________of demand.

elasticity

When demand is unit elastic, the percentage change in quantity demanded is ______ the percentage change in price.

equal to

The length of time over which producers are unable to respond to a change in price with a change in quantity supplied is known as the ______. Multiple choice question. price elasticity of demand unit elasticity period immediate market period price elasticity of supply

immediate market period

The percentage change in quantity demanded divided by the percentage change in income is the formula for the ______ elasticity of demand. Multiple choice question. income price unit cross

income

When the price elasticity of demand for a product is relatively price elastic and price is ______, total revenue will ______. Multiple choice question. increased; increase decreased; decrease increased; stay constant increased; decrease

increased; decrease

Because of the limited, highly _____________ supply of gold, small changes in demand produce large changes in price.

inelastic

The demand for a heart transplant would be considered price______________

inelastic

The short-run demand for gasoline has been shown to be more price___________________ than long-run demand.

inelastic

When price and total revenue move in the same direction along the demand curve, this indicates that demand is________________

inelastic

Lowering the price of a product along the ______ range of demand will decrease total revenue. Multiple choice question. higher unit-elastic elastic inelastic

inelastic Reason: Recall the relationship between the price elasticity of demand and total revenue. Total revenue will decline when the price of a relatively price inelastic product is lowered.

Demand is more price elastic toward the upper-left segment of the demand curve because the original reference quantity ______. Multiple choice question. does not matter is large is infinite is small

is small

When the price elasticity coefficient is equal to infinity, the product exhibits ______ demand.

perfectly elastic

Other things being equal, there is greater ______ when the price of a good or service is high relative to consumers' incomes. Multiple choice question.

price elasticity of demand

The government pays close attention to the ______ when it selects which goods and services to tax. Multiple choice question. price elasticity of demand cross price elasticity of demand income elasticity of demand price elasticity of supply

price elasticity of demand

The proportion of consumers' incomes allocated to a particular good or service is a determinant of ______. Multiple choice question. price elasticity of supply net profitability total revenue price elasticity of demand

price elasticity of demand

If the quantity supplied by producers is relatively insensitive to price changes, supply is ______. Multiple choice question. relatively price elastic relatively price inelastic perfectly price elastic unit price elastic

relatively price inelastic

For policymakers to achieve the goal of higher total farm incomes, farm output must be ______. Multiple choice question. improved restricted sold as exports increased

restricted Reason: Because the price elasticity of farm products is highly inelastic, output must be restricted in order for the price to rise. A higher price will result in higher total farm incomes.

In the ______, a farmer would have time to cultivate a crop more intensively by applying more variable inputs, such as labor, fertilizer, and pesticides. Multiple choice question. short run long run market immediate market period

short run Reason: In the short run, farmers can adjust their variable inputs to produce more or less. In the market period, nothing can be adjusted. Farmer can sell only what they have produced.

Larger positive cross elasticity implies greater ______ between two products. Multiple choice question. complementarity substitutability inelasticity unrelatedness

substitutability

The percentage change in quantity demanded divided by the percentage change in price describes ______.

the basic formula for the price elasticity of demand coefficient