econ test 2 ch. 4 pt. 2

The elasticity of supply coefficient for bicycles is estimated to be equal to 1.5. It is expected, therefore, that a 4% increase in price would lead to:

6% increase in the quantity of bicycles supplied.

Which of the following is false?

When supply is inelastic, a 1 percent change in the price of a good will induce a more than 1 percent change in the quantity supplied

Which of the following is false?

When supply is inelastic, a 1 percent change in the price of a good will induce a more than 1 percent change in the quantity supplied.

The elasticity of supply coefficient for lobster is estimated to be equal to 0.6. It is expected, therefore, that a 10% decrease in price would lead to:

a 6% decrease in the quantity of lobsters supplied

The elasticity of supply coefficient for lobster is estimated to be equal to 0.6. It is expected, therefore, that a 10% decrease in price would lead to:

a 6% decrease in the quantity of lobsters supplied.

The elasticity of supply coefficient for bicycles is estimated to be equal to 1.5. It is expected, therefore, that a 4% increase in price would lead to

a 6% increase in the quantity of bicycles supplied.

A 10% decrease in the price of energy bars leads to a 20% increase in the quantity of energy bars demanded. It appears that:

demand is elastic and total revenue will increase.

If a price decrease leads to an increase in total revenue, demand must be:

either c. or d. above

A price cut will increase the total revenue a firm receives if the demand for its product is:

elastic

If most passenger trains operate far below full capacity and demand is ____, reducing travel fares would be likely to increase total revenue.

elastic

Supply is said to be ____ when the quantity supplied is very responsive to changes in price.

elastic

A price cut will increase the total revenue a firm receives if the demand for its product is

elastic.

A price cut will increase the total revenue a firm receives if the demand for its product is:

elastic.

If the measured elasticity of supply coefficient equals 1.3, then supply is:

elastic.

If the supply curve for a product is vertical, then the elasticity of supply is:

equal to zero.

Assume the price of widgets increases by 22 percent and the quantity supplied increases by 27 percent as a result. The elasticity of supply coefficient is:

greater than 1, implying that supply is elastic.

The following schedule represents a portion of Kate's demand for sub sandwiches. Price= $6 and Quantity Demanded= 3; Price= $5 and Quantity Demanded= 5; Price= $4 and Quantity Demanded= 8. Along this portion of Kate's demand curve for sub sandwiches, price elasticity of demand is:

greater than one.

A perfectly elastic supply curve is:

horizontal.

If a good has a perfectly inelastic short-run supply curve, an increase in demand will:

increase the price and but leave the quantity exchanged the same in the short run.

If the supply curve is perfectly inelastic, then an increase in demand will:

increase the price but result in no change in the quantity exchanged

If the elasticity of demand for bangles is equal to 1, moving along the demand curve for bangles, an increase in price will

increase the quantity demanded and leave total revenue unchanged.

If the supply curve is perfectly elastic, then an increase in demand will:

increase the quantity exchanged but result in no change in the price

If the elasticity of supply of bangles is equal to 1, moving along the supply curve for bangles, an increase in price will:

increase the quantity supplied and increase total revenue.

A recent study at a liberal arts college concluded that demand elasticity is 0.91 for college courses. The administration is considering a tuition increase to help balance the budget. An economist might advise the school to:

increase tuition in order to increase revenue.

A "war on drugs" is waged, and, as a result, a larger quantity of drugs flowing into the United States is seized and more drug traffickers are arrested. If demand for drugs is inelastic, one would expect the total expenditure on drugs to:

increase.

The price elasticity of demand for tickets to local hockey matches is estimated to be equal to 0.89. In order to boost ticket revenues, an economist would advise:

increasing the price of hockey match tickets because demand is inelastic

A jeweler cut prices in his store by 20% and the dollar value of his sales fell by 20%. This is indicative of:

inelastic demand.

When the price of ulcer medication increased by $20 per 100 tablets, a drug company's revenue increased by $10 million. Its elasticity of demand coefficient (in absolute terms) must be:

less than one

When the price of ulcer medication increased by $20 per 100 tablets, a drug company's revenue increased by $10 million. Its elasticity of demand coefficient (in absolute terms) must be:

less than one.

Unlike its competitors, one glass producer can use its equipment to make either windows for houses or windows for cars. Other things equal, compared to its competitors, its supply curve of windows for cars would be:

more elastic than the supply curves of competitors.

If the supply curve for aspirin is perfectly elastic, a reduction in demand will cause the equilibrium price to:

stay the same and the equilibrium quantity to fall.

Ceteris paribus, if a 4% increase in price leads to a 6% increase in the quantity supplied, then:

supply is elastic

Ceteris paribus, if a 4% increase in price leads to a 6% increase in the quantity supplied, then:

supply is elastic.

Ceteris paribus, if an 8% increase in price leads to a 6% increase in the quantity supplied, then:

supply is inelastic.

For a given decrease in demand, the effect on price is largest and the effect on quantity exchanged smallest when

supply is perfectly inelastic

If the estimated elasticity of supply coefficient equals 0.85, then:

supply is relatively inelastic.

If the elasticity of supply coefficient for a good is 6, we know:

that for every 6% increase in quantity, there will be a 1% increase in price.

The Book Nook reduces prices by 20%. If the dollar value of The Book Nook's sales remain constant, it indicates that:

the quantity of books sold increases by 20%.

Along a supply curve, a decrease in price will increase total revenue

under no circumstances.

Along a supply curve, a decrease in price will increase total revenue:

under no circumstances.

A perfectly inelastic supply curve is:

vertical.