Micro ch 4-5 test (test questions)

When the price of Cosmopolitan magazine decreases from $5 to $3, the quantity demanded increases from 600,000 to 1,000,000 copies each month. Using the midpoint method, the price elasticity of demand equals

1

Suppose a decrease causes the price to decreases from $4 total $3 and the quantity to decrease from 1,000 to 700. Then, at the midpoint between these two prices, the elasticity of supply equals

1.24

When the price of tacos rise 4​ percent, the quantity demanded decreases 10 percent. What is the price elasticity of demand for​ tacos?

2.5

If the price elasticity of demand for a products is 2.5, then a price increase of 1.5 percent decreases the quantity demanded by

3.75%

Suppose the price of a box of cereal rises from $4 to $6. Using the midpoint method, what is the percentage change in price?

40 percent

If the demand for a good is elastic, then

A change in price leads to a larger percentage change in the quantity demanded

Airfare prices increase by 50% and other things remain the same. As a result, there is

A decrease in the quantity of air travel demanded

If the demand for digital cameras increase when consumers' income rises, then digital cameras are

A normal good

Which of the following does NOT increase the supply of personal computers, that it , does NOT shift the supply curve of personal computers?

A rise the price of a personal computer

If macaroni and cheese is an inferior good, an decrease in income will

An increase in the demand for mac and cheese

Which of the following increases the quantity supplied of yoga pants but does NOT increase the supply of yoga pants?

An increase in the price of yoga pants

At the midpoint of a linear, downward- sloping demand curve, the price elasticity of demand is

Equal to one

If the percentage in price 10 percent and the demand is unit elastic, then the percentage change in the quantity demanded

Equals 10 percent

A demand curve

Has a downward slope

If the percentage change in the price of a good exceeds the percentage change in the quantity supplied, then the supply is

Inelastic

Consumers eat salsa with taco chips. The price of salsa rises. How does the increase in the price of salsa affect the demand for taco chips?

It decreases the demand for taco chips.

Consider a demand curve for apples. "A change in the price of apples leads to a _________ the demand curve for apples because _______

Movement along; all other factors influencing buying plans are held constant

Suppose the demand for rescue services is our national parks in perfectly inelastic. This fact would mean that a 31 percent increase in rescue fees leads to

No change in the quantity demanded

Total revenue equals

Price x quantity sold

The phrase "a change in demand" refers to a

Shift of the demand curve

One reason why the demand for gas is inelastic is because

Substitutes for gas are hard to find

What is the "quantity demanded"?

The amount of a good that people are able and willing to buy during a specific time period and at a given price

What is measured by the price elasticity of supply

The price elasticity of supply measures how responsive producers are to change in the price of a product

The midpoint method of calculating a percentage change in price between two points on a demand curve results in

The same percentage, regardless of whether the price increases or decreases

The law of demand refers to the fact that, other things remaining the same, when the price of a goo rises,

There is a movement up along the demand curve to a smaller quantity demanded

If the price of oranges is below the equilibrium price

There is a shortage of oranges

Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound. What takes place?

There is a shortage, so the price rises and quantity demanded *begins to* decreases.

When the percentage change in demanded equals the percentage change in prices, demand is

Unit elastic

Suppose the demand for peaches sold from one roadside stand in Georgia is perfectly elastic. As a result, a 7 percent increase in the price charged by the owner of this stand leads to

Zero peaches sold by this stand

Which of the following increases the supply of a good and shifts its supply curve rightward?

a technological advance in how the good is produced

Which of the following leads to an increase in the quantity supplied but not an increase in supply?

an increase in the product's price

A market is defined as

any arrangement that brings buyers and sellers together

A surplus of cardboard boxes means that

at the current price of a cardboard box, the quantity demanded is less than the quantity supplied.

price elasticity of demand is the measure of

buyers' responsiveness to changes in the price of a product.

To determine the price elasticity of demand, we

compare the percentage change in the quantity demanded to the percentage change in the price.

Mulch is shredded wood and is a by-product in the production of lumber. Because these two goods are produced together, they are

complements in production

The price of lumber increased by 10 percent and the quantity supplied increased by 20 percent. The supply of lumber is

elastic

The law of supply states that , other things remaining the same,

if the price of a good increases, the quantity supplied increases

An increase in the number of fast-food restaurants

increases the supply of fast-food meals

When the percentage change in the quantity demanded is less than the percentage change in price, then demand is

inelastic

A supply curve

is a graph of the relationship between quantity supplied of a good and its prices AND Slopes upward

The demand for necessities generally is _______ the demand for luxury goods

less elastic than

The greater the amount of time that passes after a price change, the

more elastic supply becomes.

An increase in quantity demanded is shown as

movement along the demand curve

Market equilibrium occurs when

quantity demanded equals quantity supplied

Two brands of water, Natural Water and Mountain Water, are close substitutes. If the price of Mountain Water decreases, the fall in price

shifts the demand curve for Natural Water leftward.

To find the market demand curve for in-line skates, we must

sum horizontally the individual demand curves of all the buyers

If a market begins in equilibrium and then the demand curve shifts leftward, a

surplus is created, which is eliminated by a fall in price.

Hot dogs and hot dog buns are complements. If the price of a hot dog falls, then

the demand for hot dog buns will increase.