ECON 131 HW 5

Refer to Figure 5-14. Using the midpoint method, what is the price elasticity of supply between $100 and $220? A. 0.58 B. 0.67 C. 1.00 D. 1.73

A. 0.58

In the market for oil in the short run, demand A. and supply are both elastic. B. and supply are both inelastic. C. is elastic and supply is inelastic. D. is inelastic and supply is elastic.

B. and supply are both inelastic.

A good will have a more inelastic demand, the A. greater the availability of close substitutes. B. broader the definition of the market. C. longer the period of time. D. more it is regarded as a luxury.

B. broader the definition of the market.

If the cross-price elasticity of two goods is negative, then the two goods are A. necessities. B. complements. C. normal goods. D. inferior goods.

B. complements.

Refer to Figure 5-14. Over which range is the supply curve in this figure the most elastic? A. $16 to $40 B. $40 to $100 C. $100 to $220 D. $220 to $430

A. $16 to $40

Suppose that when the price of good X falls from $10 to $8, the quantity demanded of good Y rises from 20 units to 25 units. Using the midpoint method, the cross-price elasticity of demand is A. -1.0, and X and Y are complements. B. -1.0, and X and Y are substitutes. C. 1.0, and X and Y are complements. D. 1.0, and X and Y are substitutes.

A. -1.0, and X and Y are complements.

If the price elasticity of demand for apples is 0.8, then a 2.4% increase in the price of apples will decrease the quantity demanded of apples by A. 1.92%, and apples sellers' total revenue will increase as a result. B. 1.92%, and apples sellers' total revenue will decrease as a result. C. 3%, and apples sellers' total revenue will increase as a result. D. 3%, and apples sellers' total revenue will decrease as a result.

A. 1.92%, and apples sellers' total revenue will increase as a result.

Why was OPEC unable to maintain high oil prices in the long run? A. Demand and supply are both elastic in the long run compared to the short run. B. Demand and supply are both inelastic in the long run compared to the short run. C. Demand is elastic and supply is inelastic in the long run compared to the short run. D. Demand is inelastic and supply is elastic in the long run compared to the short run. Reset Selection

A. Demand and supply are both elastic in the long run compared to the short run.

Which of the following statements is valid when the market supply curve is vertical? A. Market quantity supplied does not change when the price changes. B. Supply is perfectly elastic. C. An increase in market demand will increase the equilibrium quantity. D. An increase in market demand will not increase the equilibrium price.

A. Market quantity supplied does not change when the price changes.

When demand is elastic, a decrease in price will cause A. an increase in total revenue. B. a decrease in total revenue. C. no change in total revenue but an increase in quantity demanded. D. no change in total revenue but a decrease in quantity demanded.

A. an increase in total revenue.

A decrease in supply will cause the largest increase in price when A. both supply and demand are inelastic. B. both supply and demand are elastic. C. demand is elastic and supply is inelastic. D. demand is inelastic and supply is elastic.

A. both supply and demand are inelastic.

If demand is price inelastic, then A. buyers do not respond much to a change in price. B. buyers respond substantially to a change in price, but the response is very slow. C. buyers do not alter their quantities demanded much in response to advertising, fads, or general changes in tastes. D. the demand curve is very flat.

A. buyers do not respond much to a change in price.

Demand is said to be unit elastic if quantity demanded A. changes by the same percent as the price. B. changes by a larger percent than the price. C. changes by a smaller percent than the price. D. does not respond to a change in price.

A. changes by the same percent as the price.

Suppose that 50 ice cream cones are demanded at a particular price. If the price of ice cream cones rises from that price by 4 percent, the number of ice cream cones demanded falls to 46. Using the midpoint approach to calculate the price elasticity of demand, it follows that the A. demand for ice cream cones in this price range is elastic. B. demand for ice cream cones in this price range is inelastic. C. demand for ice cream cones in this price range is unit elastic. D. price elasticity of demand for ice cream cones in this price range is 0.

A. demand for ice cream cones in this price range is elastic.

When the price of candy bars is $1.00, the quantity demanded is 500 per day. When the price falls to $0.80, the quantity demanded increases to 600. Given this information and using the midpoint method, we know that the demand for candy bars is A. inelastic. B. elastic. C. unit elastic. D. perfectly inelastic.

A. inelastic.

Which of the following is likely to have the most price-elastic demand? A. lattés B. doctor's visits C. eggs D. natural gas

A. lattés

Goods with many close substitutes tend to have A. more elastic demands. B. less elastic demands. C. price elasticities of demand that are unit elastic. D. income elasticities of demand that are negative.

A. more elastic demands.

For which of the following goods is the price elasticity of demand most inelastic? A. pizza B. large pizza C. large pepperoni pizza D. Domino's large pepperoni pizza

A. pizza

When consumers face rising gasoline prices, they typically A. reduce their quantity demanded more in the long run than in the short run. B. reduce their quantity demanded more in the short run than in the long run. C. do not reduce their quantity demanded in the short run or the long run. D. increase their quantity demanded in the short run but reduce their quantity demanded in the long run.

A. reduce their quantity demanded more in the long run than in the short run.

For a good that is a necessity, demand A. tends to be inelastic. B. tends to be elastic. C. has unit elasticity. D. cannot be represented by a demand curve in the usual way.

A. tends to be inelastic.

If the price of walnuts rises, many people would switch from consuming walnuts to consuming pecans. But if the price of salt rises, people would have difficulty purchasing something to use in its place. These examples illustrate the importance of A. the availability of close substitutes in determining the price elasticity of demand. B. a necessity versus a luxury in determining the price elasticity of demand. C. the definition of a market in determining the price elasticity of demand. D. the time horizon in determining the price elasticity of demand.

A. the availability of close substitutes in determining the price elasticity of demand.

Suppose demand is perfectly elastic, and the supply of the good in question decreases. As a result, A. the equilibrium quantity decreases, and the equilibrium price is unchanged. B. the equilibrium price increases, and the equilibrium quantity is unchanged. C. the equilibrium quantity and the equilibrium price both are unchanged. D. buyers' total expenditure on the good is unchanged.

A. the equilibrium quantity decreases, and the equilibrium price is unchanged.

Income elasticity of demand measures how A. the quantity demanded changes as consumer income changes. B. consumer purchasing power is affected by a change in the price of a good. C. the price of a good is affected when there is a change in consumer income. D. many units of a good a consumer can buy given a certain income level.

A. the quantity demanded changes as consumer income changes.

A key determinant of the price elasticity of supply is the A. time horizon. B. income of consumers. C. price elasticity of demand. D. importance of the good in a consumer's budget.

A. time horizon.

As the price elasticity of supply approaches infinity, very small changes in price lead to A. very large changes in quantity supplied. B. very small changes in quantity supplied. C. no change in quantity supplied. D. None of the above is correct.

A. very large changes in quantity supplied.

Refer to Figure 5-1. Between point A and point B, the slope is equal to A. -1/4, and the price elasticity of demand is equal to 2/3. B. -1/4, and the price elasticity of demand is equal to 3/2. C. -3/2, and the price elasticity of demand is equal to 1/4. D. -2/3, and the price elasticity of demand is equal to 3/2.

B. -1/4, and the price elasticity of demand is equal to 3/2.

Refer to Table 5-2. Using the midpoint method, if the price falls from $100 to $50, the absolute value of the price elasticity of demand is A. 0.31. B. 0.46. C. 1.25. D. 2.17.

B. 0.46.

Refer to Table 5-2. Using the midpoint method, if the price falls from $200 to $150, the absolute value of the price elasticity of demand is A. 5.3. B. 2.8. C. 0.8. D. 0.36.

B. 2.8.

Studies indicate that the price elasticity of demand for cigarettes is about 0.4. A government policy aimed at reducing smoking changed the price of a pack of cigarettes from $2 to $6. According to the midpoint method, the government policy should have reduced smoking by A. 30%. B. 40%. C. 80%. D. 250%.

B. 40%.

Suppose an airline determines that its customers traveling for business have inelastic demand and its customers traveling for vacations have an elastic demand. If the airline's objective is to increase total revenue, it should A. increase the price charged to vacationers and decrease the price charged to business travelers. B. decrease the price charged to vacationers and increase the price charged to business travelers. C. decrease the price to both groups of customers. D. increase the price for both groups of customers.

B. decrease the price charged to vacationers and increase the price charged to business travelers.

Because the demand for wheat tends to be inelastic, the development of a new, more productive hybrid wheat would tend to A. increase the total revenue of wheat farmers. B. decrease the total revenue of wheat farmers. C. decrease the demand for wheat. D. decrease the supply of wheat.

B. decrease the total revenue of wheat farmers.

Refer to Figure 5-8. An increase in price from $15 to $20 would A. increase total revenue by $500 B. decrease total revenue by $500. C. increase total revenue by $1,000. D. decrease total revenue by $1,000.

B. decrease total revenue by $500.

If the demand for textbooks is inelastic, then a decrease in the price of textbooks will A. increase total revenue of textbook sellers. B. decrease total revenue of textbook sellers. C. not change total revenue of textbook sellers. D. There is not enough information to answer this question.

B. decrease total revenue of textbook sellers.

Elasticity of demand is closely related to the slope of the demand curve. The more responsive buyers are to a change in price, the A. steeper the demand curve will be. B. flatter the demand curve will be. C. further to the right the demand curve will sit. D. closer to the vertical axis the demand curve will sit.

B. flatter the demand curve will be.

In the early 1970s, OPEC's goal was to A. decrease the world-wide price of oil so that the quantity demanded increased, thus raising total revenues for OPEC members. B. increase the world-wide price of oil by reducing the quantity of oil supplied. C. increase the world-wide price of oil by increasing the quantity of oil supplied, thus raising total revenues for OPEC members. D. decrease the world-wide price of oil so that quantity demanded increased.

B. increase the world-wide price of oil by reducing the quantity of oil supplied.

Refer to Figure 5-6. For prices below $8, demand is price A. elastic, and total revenue will rise as price rises. B. inelastic, and total revenue will rise as price rises. C. elastic, and total revenue will fall as price rises. D. inelastic, and total revenue will fall as price rises.

B. inelastic, and total revenue will rise as price rises.

An increase in price causes an increase in total revenue when demand is A. elastic. B. inelastic. C. unit elastic. D. All of the above are possible.

B. inelastic.

Refer to Table 5-2. Using the midpoint method, if the price falls from $100 to $50, the price elasticity of demand is A. zero. B. inelastic. C. unit elastic. D. elastic.

B. inelastic.

A perfectly inelastic demand implies that buyers A. decrease their purchases when the price rises. B. purchase the same amount as before when the price rises or falls. C. increase their purchases only slightly when the price falls. D. respond substantially to an increase in price.

B. purchase the same amount as before when the price rises or falls.

If the price elasticity of supply for a good is equal to infinity, then the A. supply curve is vertical. B. supply curve is horizontal. C. supply curve also has a slope equal to infinity. D. quantity supplied is constant regardless of the price.

B. supply curve is horizontal.

If the quantity supplied responds only slightly to changes in price, then A. supply is said to be elastic. B. supply is said to be inelastic. C. an increase in price will not shift the supply curve very much. D. even a large decrease in demand will change the equilibrium price only slightly.

B. supply is said to be inelastic.

Suppose demand is perfectly inelastic, and the supply of the good in question decreases. As a result, A. the equilibrium quantity decreases, and the equilibrium price is unchanged. B. the equilibrium price increases, and the equilibrium quantity is unchanged. C. the equilibrium quantity and the equilibrium price both are unchanged. D. buyers' total expenditure on the good is unchanged.

B. the equilibrium price increases and the equilibrium quantity is unchanged.

The price elasticity of supply measures how much A. the quantity supplied responds to changes in input prices. B. the quantity supplied responds to changes in the price of the good. C. the price of the good responds to changes in supply. D. sellers respond to changes in technology.

B. the quantity supplied responds to changes in the price of the good.

A manufacturer produces 1,000 units, regardless of the market price. For this firm, the price elasticity of supply is A. infinity. B. zero. C. one. D. negative one.

B. zero.

Refer to Figure 5-14. Over which range is the supply curve in this figure the least elastic? A. $16 to $40 B. $40 to $100 C. $100 to $220 D. $220 to $430

D. $220 to $430

When the price of good A is $50, the quantity demanded of good A is 500 units. When the price of good A rises to $70, the quantity demanded of good A falls to 400 units. Using the midpoint method, the price elasticity of demand for good A is A. 1.50, and an increase in price will result in an increase in total revenue for good B. 1.50, and an increase in price will result in a decrease in total revenue for good C. 0.67, and an increase in price will result in an increase in total revenue for good D. 0.67, and an increase in price will result in a decrease in total revenue for good

C. 0.67, and an increase in price will result in an increase in total revenue for good A.

When demand is unit elastic, price elasticity of demand equals A. 1, and total revenue and price move in the same direction. B. 1, and total revenue and price move in opposite directions. C. 1, and total revenue does not change when price changes. D. 0, and total revenue does not change when price changes.

C. 1, and total revenue does not change when price changes.

Refer to Figure 5-14. Using the midpoint method, what is the price elasticity of supply between $16 and $40? A. 0.125 B. 0.86 C. 1.0 D. 2.5

C. 1.0

Refer to Table 5-2. Using the midpoint method, if the price falls from $150 to $100, the absolute value of the price elasticity of demand is A. 0.4. B. 0.9. C. 1.1. D. 2.

C. 1.1.

Refer to Figure 5-16. Using the midpoint method, what is the price elasticity of supply between $6 and $8? A. 0.86 B. 1.00 C. 1.17 D. 1.25

C. 1.17

If the price elasticity of supply is 1.5, and a price increase led to a 1.8% increase in quantity supplied, then the price increase is about A. 0.67%. B. 0.83%. C. 1.20%. D. 2.70%.

C. 1.20%.

Refer to Figure 5-1. Between point A and point B, price elasticity of demand is equal to A. 0.33. B. 0.67. C. 1.5. D. 2.67.

C. 1.5.

A manufacturer produces 400 units when the market price is $10 per unit and produces 600 units when the market price is $12 per unit. Using the midpoint method, for this range of prices, the price elasticity of supply is about A. 0.45. B. 2.0. C. 2.2. D. 200

C. 2.2.

Suppose the price of a bag of frozen chicken nuggets decreases from $6.50 to $5.75 and, as a result, the quantity of bags demanded increases from 600 to 800. Using the midpoint method, the price elasticity of demand for frozen chicken nuggets in the given price range is A. 0.35. B. 0.43. C. 2.33. D. 2.89

C. 2.33.

If the price elasticity of demand for a good is 0.5, then a 5 percent increase in price results in a A. 0.1 percent decrease in the quantity demanded. B. 1 percent decrease in the quantity demanded. C. 2.5 percent decrease in the quantity demanded. D. 10 percent decrease in the quantity demanded.

C. 2.5 percent decrease in the quantity demanded.

If the price elasticity of demand for a good is 2.0, then a 10 percent increase in price results in a A. 0.2 percent decrease in the quantity demanded. B. 5 percent decrease in the quantity demanded. C. 20 percent decrease in the quantity demanded. D. 40 percent decrease in the quantity demanded.

C. 20 percent decrease in the quantity demanded.

Suppose the price elasticity of supply for cheese is 0.6 in the short run and 1.4 in the long run. If an increase in the demand for cheese causes the price of cheese to increase by 15%, then the quantity supplied of cheese will increase by A. 0.4% in the short run and 4.6% in the long run. B. 1.7% in the short run and 0.7% in the long run. C. 9% in the short run and 21% in the long run. D. 25% in the short run and 10.7% in the long run.

C. 9% in the short run and 21% in the long run.

Which of the following statements helps to explain why government drug interdiction increases drug-related crime? A. The direct impact is on buyers, not sellers. B. Successful drug interdiction policies reduce the demand for illegal drugs. C. Drug addicts will have an even greater need for quick cash to support their habits. D. In the short run, both equilibrium quantities and prices will fall in the markets for illegal drugs.

C. Drug addicts will have an even greater need for quick cash to support their habits.

How does total revenue change as one moves downward and to the right along a linear demand curve? A. It always increases. B. It always decreases. C. It first increases, then decreases. D. It is unaffected by a movement along the demand curve.

C. It first increases, then decreases.

Which of the following is likely to have the most price-elastic demand? A. clothing B. blue jeans C. Tommy Hilfiger jeans D. All three would have the same elasticity of demand because they are all related.

C. Tommy Hilfiger jeans

Suppose good X has a negative income elasticity of demand. This implies that good X is A. a normal good. B. a necessity. C. an inferior good. D. a luxury.

C. an inferior good.

Good news for farming can be bad news for farmers because the A. supply curve for an individual farmer is usually perfectly elastic. B. supply curve for an individual farmer is usually perfectly inelastic. C. demand for basic foodstuffs is usually inelastic, meaning that factors that shift supply to the right decrease total revenues to sellers. D. demand for basic foodstuffs is usually elastic, meaning that factors that shift supply to the right

C. demand for basic foodstuffs is usually inelastic, meaning that factors that shift supply to the right decrease total revenues to sellers.

Refer to Figure 5-6. For prices above $8, demand is price A. elastic, and total revenue will rise as price rises. B. inelastic, and total revenue will rise as price rises. C. elastic, and total revenue will fall as price rises. D. inelastic, and total revenue will fall as price rises.

C. elastic, and total revenue will fall as price rises.

Refer to Figure 5-8. When price falls from $25 to $20, demand is A. inelastic, since total revenue decreases from $4,000 to $2,500. B. inelastic, since total revenue increases from $2,500 to $4,000. C. elastic, since total revenue increases from $2,500 to $4,000. D. unit elastic, since total revenue does not change.

C. elastic, since total revenue increases from $2,500 to $4,000.

The price elasticity of supply along a typical supply curve is A. constant. B. equal to zero. C. higher at low levels of quantity supplied and lower at high levels of quantity supplied. D. lower at low levels of quantity supplied and higher at high levels of quantity supplied.

C. higher at low levels of quantity supplied and lower at high levels of quantity supplied.

Refer to Figure 5-8. An increase in price from $10 to $15 would A. increase total revenue by $1,000. B. decrease total revenue by $1,000. C. increase total revenue by $500. D. decrease total revenue by $500.

C. increase total revenue by $500.

Economists compute the price elasticity of demand as the A. percentage change in price divided by the percentage change in quantity demanded. B. change in quantity demanded divided by the change in the price. C. percentage change in quantity demanded divided by the percentage change in price. D. percentage change in quantity demanded divided by the percentage change in income.

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

Suppose that when the price of wheat is $2 per bushel, farmers can sell 10 million bushels. When the price of wheat is $3 per bushel, farmers can sell 8 million bushels. Which of the following statements is true? The demand for wheat is A. income inelastic, so an increase in the price of wheat will increase the total revenue of wheat farmers. B. income elastic, so an increase in the price of wheat will increase the total revenue of wheat farmers. C. price inelastic, so an increase in the price of wheat will increase the total revenue of wheat farmers. D. price elastic, so an increase in the price of wheat will increase the total revenue of wheat farmers.

C. price inelastic, so an increase in the price of wheat will increase the total revenue of wheat farmers.

Which of the following is likely to have the most price inelastic demand? A. white chocolate chip with macadamia nut cookies B. hardback novels C. salt D. box seats at a major league baseball game

C. salt

When a supply curve is relatively flat, the A. sellers are not at all responsive to a change in price. B. equilibrium price changes substantially when the demand for the good changes. C. supply is relatively elastic. D. supply is relatively inelastic.

C. supply is relatively elastic.

Cross-price elasticity of demand measures how A. the price of one good changes in response to a change in the price of another good. B. the quantity demanded of one good changes in response to a change in the quantity demanded of another good. C. the quantity demanded of one good changes in response to a change in the price of another good. D. strongly normal or inferior a good is.

C. the quantity demanded of one good changes in response to a change in the price of another good.

The federal government is concerned about obesity in the United States. Congress is considering two plans. One will ban the production and sale of "junk food." The other will increase nutrition-education programs and include substantial advertising campaigns to encourage healthy eating habits. The junk-food ban program A. and the education program will reduce the quantity of junk food sold and raise the price. B. and the education program will reduce the quantity of junk food sold and lower the price. C. will reduce the quantity of junk food sold and raise the price. The education program will reduce the quantity of junk food sold and lower the price. D. will reduce the quantity of junk food sold and lower the price. The education program will reduce the quantity of junk food sold and raise the price.

C. will reduce the quantity of junk food sold and raise the price. The education program will reduce the quantity of junk food sold and lower the price.

Refer to Figure 5-8. When the price is $15, total revenue is A. $1,500. B. $2,500. C. $3,500. D. $4,500.

D. $4,500.

Suppose that when the price of good X increases from $800 to $850, the quantity demanded of good Y increases from 65 to 70. Using the midpoint method, the cross price elasticity of demand is about A. -1.2, and X and Y are complements. B. -0.1, and X and Y are complements. C. 0.1, and X and Y are substitutes. D. 1.2, and X and Y are substitutes.

D. 1.2, and X and Y are substitutes.

Refer to Figure 5-16. Using the midpoint method, what is the price elasticity of supply between $4 and $6? A. 0.75 B. 1.00 C. 1.20 D. 1.25

D. 1.25

A bakery would be willing to supply 500 bagels per day at a price of $0.50 each. At a price of $0.80, the bakery would be willing to supply 1,100 bagels. Using the midpoint method, the price elasticity of supply for bagels is about A. 0.62. B. 0.77. C. 1.24. D. 1.63.

D. 1.63.

On a certain supply curve, one point is (quantity supplied = 200, price = $4.00) and another point is (quantity supplied = 250, price = $4.50). Using the midpoint method, the price elasticity of supply is about A. 0.22. B. 0.53. C. 1.00. D. 1.89.

D. 1.89.

Heath's income elasticity of demand for concerts is 2. All else equal, this means that if his income increases by 10 percent, he will purchase tickets for A. 2 percent more concerts. B. 5 percent more concerts. C. 10 percent more concerts. D. 20 percent more concerts.

D. 20 percent more concerts.

Last year, Tess bought 5 handbags when her income was $54,000. This year, her income is $60,000, and she purchased 7 handbags. Holding other factors constant, it follows that Tess's income elasticity of demand is about A. 0.32, and Tess regards handbags as inferior goods. B. 0.32, and Tess regards handbags as normal goods. C. 3.17, and Tess regards handbags as inferior goods. D. 3.17, and Tess regards handbags as normal goods.

D. 3.17, and Tess regards handbags as normal goods.

The demand for Godiva mint chocolates is likely quite elastic because A. there are many close substitutes. B. this particular type of chocolate is viewed as a luxury by many chocolate lovers. C. the market is narrowly defined. D. All of the above are correct.

D. All of the above are correct.

A city wants to raise revenues to build a new municipal swimming pool next year. The mayor suggests that the city raise the price of admission to the current municipal pools this year to raise revenues. The city manager suggests that the city lower the price of admission to raise revenues. Who is correct? A. Both the mayor and city manager would be correct if demand were price elastic. B. Both the mayor and city manager would be correct if demand were price inelastic. C. The mayor would be correct if demand were price elastic; the city manager would be correct if demand were price inelastic. D. The mayor would be correct if demand were price inelastic; the city manager would be correct if demand were price elastic.

D. The mayor would be correct if demand were price inelastic; the city manager would be correct if demand were price elastic.

Demand is said to be price elastic if A. the price of the good responds substantially to changes in demand. B. demand shifts substantially when income or the expected future price of the good changes. C. buyers do not respond much to changes in the price of the good. D. buyers respond substantially to changes in the price of the good.

D. buyers respond substantially to changes in the price of the good.

The cross-price elasticity of demand can tell us whether goods are A. normal or inferior. B. elastic or inelastic. C. luxuries or necessities. D. complements or substitutes.

D. complements or substitutes.

Refer to Table 5-2. Using the midpoint method, if the price falls from $200 to $150, the price elasticity of demand is A. zero. B. unit elastic. C. inelastic. D. elastic.

D. elastic

Refer to Figure 5-1. Between point A and point B on the graph, demand is A. perfectly elastic. B. inelastic. C. unit elastic. D. elastic, but not perfectly elastic.

D. elastic, but not perfectly elastic

Holding all other factors constant and using the midpoint method, if a candy manufacturer increases production by 20 percent when the market price of candy increases from $0.50 to $0.60, then supply is A. inelastic, since the price elasticity of supply is equal to .91. B. inelastic, since the price elasticity of supply is equal to 1.1. C. elastic, since the price elasticity of supply is equal to 0.91. D. elastic, since the price elasticity of supply is equal to 1.1.

D. elastic, since the price elasticity of supply is equal to 1.1.

Necessities such as food and clothing tend to have A. high price elasticities of demand and high income elasticities of demand. B. high price elasticities of demand and low income elasticities of demand. C. low price elasticities of demand and high income elasticities of demand. D. low price elasticities of demand and low income elasticities of demand.

D. low price elasticities of demand and low income elasticities of demand.

If the price of natural gas rises, when is the price elasticity of demand likely to be the highest? A. immediately after the price increase B. one month after the price increase C. three months after the price increase D. one year after the price increase

D. one year after the price increase

A drug interdiction program that successfully reduces the supply of illegal drugs in the United States likely will A. raise the price, reduce the quantity, decrease total revenues, and decrease crime. B. lower the price, increase the quantity, increase total revenues, and increase crime. C. raise the price, increase the quantity, decrease total revenues, and increase crime. D. raise the price, reduce the quantity, increase total revenues, and increase crime.

D. raise the price, reduce the quantity, increase total revenues, and increase crime.

As we move downward and to the right along a linear, downward-sloping demand curve, A. both slope and elasticity remain constant. B. slope changes but elasticity remains constant. C. both slope and elasticity change. D. slope remains constant but elasticity changes.

D. slope remains constant but elasticity changes.