Micro Chapter 6 Quiz

The table given below reports the price and quantity demanded of a commodity. According to Table 6.1, when the price increases from $5 to $6, the price elasticity of demand is _____.

1.67

If the price elasticity of supply is 0.75, it would imply that a _____.

120 percent increase in price would increase the quantity supplied by 90 percent

Acme Tools manufactures anvils, a forging tool. When the price of anvils was increased from $7 to $13, Acme Tools was willing and able to increase production from 1 to 4 units per day. Using the midpoint formula, what is Acme's price elasticity of supply for anvils?

2

If 12 candy bars are demanded at $0.30 each and 4 candy bars are demanded at $0.50 each, what is the elasticity of demand over the price range from $0.30 to $0.50?

2

Assume that the price elasticity of demand for a commodity is 0.20. A 10 percent increase in the price of the commodity will be followed by a:

2 percent decrease in the quantity demanded.

What would be the consequence of a 10 percent decrease in the price of a good for which price elasticity of demand is 5?

A 50 percent increase in the quantity demanded

Which of the following goods is likely to have an income elasticity of demand that is less than zero?

A box of generic macaroni and cheese dinner

Goods whose income elasticity of demand is greater than zero are _____.

Normal Goods

Which of the following situations is represented by a nearly horizontal supply curve for a good?

Small changes in the price of the good lead to large changes in the quantity supplied of the good.

The figure given below shows the demand curves for five products: A, B, C, D, and E. Refer to Figure 6.1. Which of the following is true of the demand curve for A?

There is no change in the quantity demanded of A as the price changes.

If the demand for corn is elastic, then:

a decrease in price will reduce total revenue for corn producers.

Demand for a good becomes more elastic as:

a good makes up a larger percentage of a consumer's budget.

When the price of hot dogs at the supermarket increases, the quantity demanded of hot dog buns declines. This situation describes:

c. the negative cross-price elasticity of demand for hot dogs and hot dog buns.

Price elasticity of demand is the sole determinant of profit for a firm.

false

The figure given below shows the demand curves for five products: A, B, C, D, and E. Refer to Figure 6.1. The demand curve B is:

less elastic compared to demand curve C.

When product A is a substitute for product B, the cross-price elasticity of demand for products A and B will be _____.

positive

If = -1.50 for a good, and price of the good decreases by 20 percent, then:

quantity demanded will increase by 30 percent.

Since an expensive sports car constitutes a greater portion of a consumer's budget than does laundry soap, the price elasticity of demand for an expensive sports car is _____.

relatively more elastic

When the manager of a local movie theater raises the price of movie tickets from $7.50 to $8.50, his total revenue falls. This means that:

the demand for movie tickets is highly elastic.

A 0.5% increase in the price of a particular product causes the quantity demanded of the product to drop to zero. This means that the price elasticity of demand for the product is:

​perfectly elastic.