ECO 211 QUIZ 4

The price elasticity of demand for oranges ________ change if the units of the quantity was changed from pounds to kilograms and ________ change if the units of the price was changed from dollars to cents. would; would would not; would would not; would not would; would not

would not; would not

Because of an increase in the price of leather, the price of a pair of women's dress shoes increased 12 percent. If the price elasticity of demand for women's dress shoes is 0.85, which of the following will happen? Total expenditure on women's dress shoes decreases. The number of pairs of women's dress shoes demanded decreases by 10.2 percent. Total revenue from the sale of women's dress shoes decreases. none of the above

The number of pairs of women's dress shoes demanded decreases by 10.2 percent.

The price elasticity of demand for purses is measured in what units? dollars purses dollars per purse The price elasticity of demand is a unitless measure.

The price elasticity of demand is a unitless measure.

Suppose the price elasticity of teenagers' demand for cigarettes is 2.0. If the government imposes a tax on cigarettes that raises the price by 10 percent, by how much will it reduce teenaged smoking? by 5 percent by 10 percent by 15 percent by 20 percent

by 20 percent

The price elasticity of demand for cigarettes is 0.4. If government wants to reduce smoking by 10 percent, by how much should it raise the price of cigarettes by imposing a tax? by 50 percent by 25 percent by 10 percent by 20 percent

by 25 percent

The price elasticity of demand for DVDs is 2. If the price of a DVD increased by 2 percent, the quantity demanded will decrease by 4 percent. decrease by 2 percent. decrease by 1 percent. not change.

decrease by 4 percent.

The "Economics in Action" in the text mentions that the elasticity of demand for agricultural products is 0.42. If a drought boosts the price of corn 25 percent, then we can calculate the quantity of corn demanded increased by 10.5 percent. decreased by 10.5 percent. increased by 8.4 percent. decreased by 8.4 percent.

decreased by 10.5 percent.

When the quantity of coal is measured in kilograms instead of pounds, the demand for coal becomes less elastic. undefined. more elastic. neither more nor less elastic.

neither more nor less elastic.

Suppose the price of burgers increases from $2 to $3 each. The degree to which quantity demanded responds to this price increase depends on the cross elasticity of demand. income elasticity of demand. the price elasticity of supply. price elasticity of demand.

price elasticity of demand.

The price elasticity of demand for furniture is estimated at 1.3. This value means a one percent increase in the price of furniture will increase the quantity of furniture demanded by 1.3 percent. price of furniture will decrease the quantity of furniture demanded by 1.3 percent. quantity of furniture demanded will decrease the price of furniture by 1.3 percent. quantity of furniture demanded will increase the price of furniture by 1.3 percent.

price of furniture will decrease the quantity of furniture demanded by 1.3 percent.

The price elasticity of demand for oil is estimated at 0.05. This value means a 10 percent increase in the price of oil will increase the quantity of oil demanded by 0.5 percent. price of oil will decrease the quantity of oil demanded by 0.5 percent. quantity of oil demanded will result from a 0.5 percent decrease in the price of oil. quantity of oil demanded will result from a 0.5 percent increase in the price of oil.

price of oil will decrease the quantity of oil demanded by 0.5 percent.

Elasticity measures the percentage change in a variable. change in a variable. slope of a curve. responsiveness of a variable to a change in another variable.

responsiveness of a variable to a change in another variable.

The price elasticity of demand measures how often the price of a good changes. the responsiveness of the quantity demanded to changes in price. how sensitive the quantity demanded is to changes in demand. the slope of a budget curve.

the responsiveness of the quantity demanded to changes in price.

The price elasticity of demand is 5.0 if a 10 percent increase in the price results in a ________ decrease in the quantity demanded. 50 percent 5 percent 2 percent 10 percent

50 percent

A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is 0.5. 20.0. 2.0. 10.0.

0.5.

If the price of a soda increases from 75¢ to $1.00 and as a result the quantity demanded of sodas decreases from 10 to 9 per week, the elasticity of demand for sodas equals 2.72. 0.83. 1.20. 0.37.

0.37.

Last year the price of corn was $3 per bushel and the quantity of corn demanded was 8 million bushels. This year the price of corn is $4 per bushel and the quantity of corn demanded is 7 million bushels. Assuming that the demand curve has not shifted, what is the price elasticity of demand for corn? (Use the midpoint formula.) 0.47 0.29 1 2.14

0.47

A shift of the supply curve of DVDs raises the price of a DVD from $9.50 to $10.50 a DVD and reduces the quantity demanded from 41 million to 39 million DVDs a month. The price elasticity of demand for DVDs is 2 million DVDs a month per dollar. $1 per 2 million barrels a day. 0.5. 2.0.

0.5.

If a 20 percent increase in the price of a used car results in a 10 percent decrease in the quantity of used cars demanded, then the price elasticity of demand equals 0.5. 1.0. 2.0. 10.0.

0.5.

If the price of a movie ticket increases by 4 percent and the quantity of movies demanded falls by 2 percent, the price elasticity of demand is 2.0. 4.0. 0.5. some amount that cannot be determined without more information.

0.5.

Suppose a rise in the price of peaches from $5.50 to $6.50 per bushel decreases the quantity demanded from 12,500 to 11,500 bushels. The price elasticity of demand is 2.0. 0.5. 1.0. 1000.0.

0.5.

Florida State University has just lowered the price of its season football tickets from $350.00 to $300.00. As a result, there was an increase in the number of season tickets purchased from 43,000 to 47,000. The price elasticity of demand for season tickets equals 0.71. 1.58. 0.58. 1.71.

0.58

Suppose that the quantity of root beer demanded declines from 103,000 gallons per week to 97,000 gallons per week as a consequence of a 10 percent increase in the price of root beer. The price elasticity of demand is 6.00. 1.66. 0.60. 1.40.

0.60.

Suppose the quantity of gasoline is measured in gallons and the price of gasoline is measured in dollars. The price elasticity of demand is 0.67. If the price of gasoline was now measured in cents rather than dollars, the price elasticity of demand would now be 6.7. 67.0. 0.67. 0.0067.

0.67.

Suppose the quantity demanded is 5 units when the price is $1.00. If the price rises to $2.00, the quantity demanded falls to 3 units. The price elasticity of demand is 0.5. 1.33. 0.75. 2.00.

0.75.

A fall in the price of lemons from $10.50 to $9.50 per bushel increases the quantity demanded from 19,200 to 20,800 bushels. The price elasticity of demand is 8.00. 0.80. 1.25. 1.20.

0.80.

If a 6 percent decrease in the price leads to a 5 percent increase in the quantity demanded, the price elasticity of demand is 0.83. 1.20. 0.30. 0.60.

0.83.

A decrease in the supply of sugar increases the price of sugar from $1.00 a packet to $1.25 a packet. The quantity decreases from 100 packets a day to 80 packets a day. The price elasticity of demand of sugar is 0.75. 0.5. 1.0. 1.25.

1.0.

When the price of a movie ticket increases from $5 to $7, the quantity of tickets demanded decreases from 600 to 400 a day. What is the price elasticity of demand for movie tickets? 1.20 2.32 0.83 1.00

1.20

A fall in the price of cabbage from $10.50 to $9.50 per bushel increases the quantity demanded from 18,800 to 21,200 bushels. The price elasticity of demand is 0.80. 8.00. 1.25. 1.20.

1.20.

Using average price and average quantity, calculate the price elasticity of demand if a price rise from $8 to $10 and decreases the quantity demanded from 20 units to 15 units. The price elasticity of demand equals Answers: 1.29 0.06 2.5 .0.78.

1.29

Using the average price and average quantity, what is the elasticity of demand for oranges when the price of oranges changes from $200 to $160 per bushel and so the quantity demanded changes from 1000 to 1400 bushels? 0.67 10.0 1.5 0.1

1.5

Suppose that the quantity of pizza demanded decreased by 15 percent after an increase in price of 10 percent. What is the price elasticity of demand for pizza? 1.50 -1.50 0.67 -0.67

1.50

If the price of a burger decreases by 5 percent and as a result the quantity of burgers demanded increases by 8 percent, the price elasticity of demand equals 0.60. 1.60. 0.625. 0.40.

1.60.

When the price of oranges increases from $4 to $6 per bag, the quantity demanded of oranges decreases from 800 bags to 700 bags. The price elasticity of demand over this price range is equal to 1/4 or 0.25. 3/7 or 0.4286. 3. 1/3 or 0.3333.

1/3 or 0.3333.

Taco Bell's economists determine that the price elasticity of demand for their tacos is 2.0. So, if Taco Bell raises the price of its tacos by 6.0 percent, the quantity demanded will decrease by ________ percent. 6.0 12.0 2.0 3.0

12.0

A local pizzeria raised its price from $9 to $11 for each pizza and the sales of its pizza decreased from 150 to 100 per day. What is the price elasticity of demand in this case? 1/2 2 -2 -1/2

2

Suppose the price elasticity of demand for oil is 0.1. In order to lower the price of oil by 20 percent, the quantity of oil supplied must be increased by 2 percent. 20 percent. 0.2 percent. 200 percent.

2 percent.

A 20 percent increase in the quantity of pizza demanded results from a 10 percent decline in its price. The price elasticity of demand for pizza is 20.0. 10.0. 0.5. 2.0.

2.0.

Suppose a drought increased the price of corn by 25 percent while it decreased the quantity by 50 percent. The price elasticity of demand equals 0.50. 20.0. zero. 2.00.

2.00.

According to one study, the price elasticity of demand for cigarettes is 0.25. To decrease the consumption of cigarettes by 8 percent, a tax on cigarettes must raise the price of cigarettes by 2 percent. 3.1 percent. 25 percent. 32 percent.

32 percent.

If the quantity demanded of hamburgers increases by 20 percent when the price decreases by 5 percent, then the price elasticity of demand is 20.0. 0.25. 5.0. 4.0.

4.0.

Dan sells newspapers. Dan says that a 4 percent increase in the price of a newspaper will decrease the quantity of newspapers demanded by 8 percent. According to Dan, the demand for newspapers is elastic. inelastic. unit elastic. perfectly elastic.

elastic.

The price elasticity of demand depends on the units used to measure quantity but not the units used to measure price. the units used to measure price and the units used to measure quantity. neither the units used to measure price nor the units used to measure quantity. the units used to measure price but not the units used to measure quantity.

neither the units used to measure price nor the units used to measure quantity.

The price elasticity of demand is calculated as the absolute value of the percentage change in price divided by the percentage change in quantity demanded. change in quantity demanded divided by the change in price. percentage change in quantity demanded divided by the percentage change in price. change in price divided by the change in quantity demanded.

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

The price elasticity of demand is defined as the magnitude of the percentage change in price divided by the percentage change in quantity demanded. percentage change in quantity demanded divided by the percentage change in price. change in price divided by the change in quantity demanded. change in quantity demanded divided by the change in price.

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

The price elasticity of demand equals magnitude of the percentage change in the price divided by the percentage change in the quantity demanded. change in the quantity demanded divided by the change in price. change in the price divided by the change in quantity demanded. percentage change in the quantity demanded divided by the percentage change in the price.

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

The price elasticity of demand is equal to the ________ in the ________ divided by the ________ in the ________. change; quantity demanded; change; price percentage change; price; percentage change; quantity demanded percentage change; quantity demanded; percentage change; price change; price; change; quantity demanded

percentage change; quantity demanded; percentage change; price

The worst drought in over 50 years has decimated crops of soy beans and corn in the United States. ( Source: New York Times, August 10, 2012). Because the production of corn has decreased, prices are expected to increase by 25 percent. These data are insufficient for calculating the elasticity of demand because we also need to know the percentage increase in quantity. percentage decrease in quantity. increase in bushels per acre. percentage increase in income.

percentage decrease in quantity.

A decrease in the price of eggs from $1.50 to $1.30 per dozen resulted in an increase in egg purchases in two cities. In Philadelphia, daily egg purchases increased from 6000 to 8000 dozens; in nearby Dover, Delaware, daily egg purchases increased from 300 to 400 dozens. The price elasticity of demand is therefore Answers: the same in Philadelphia as in Dover. lower in the smaller city as would be expected. greater in the smaller city as would be expected. certainly affected by population differences in different markets.

the same in Philadelphia as in Dover.