Quiz #5 Elasticity

Question 19 Higher costs can typically be passed on to consumers when a product is considered elastic .perfectly elastic. inelastic.

inelastic.

Question 1 When income increases and the demand for a good increases, the good is considered a inferior good complementary good normal good.

normal good

Question 7 Using the midpoint method, the price elasticity of demand is determined to be about 0.85. If there is a 10% decrease in the quantity demanded of the product then what effect would this have on the price of the product? A decrease in the price of the product from $8.50 to $10. An increase in the price of the product from $8.50 to $10. A 11.8% increase in the price of the product

A 11.8% increase in the price of the product

Question 20 If the demand for a product is inelastic but the supply is elastic, the ________ will bear the tax incidence. producer government consumer

consumer

Question 6 Using the midpoint method, calculate the price elasticity of demand of Good X using the following information: When the price of good X is $50, the quantity demanded of good X is 400 units. When the price of good X rises to $60, the quantity demanded of good X falls to 300 units. The price elasticity of demand for good X = 0.64. The price elasticity of demand for good X = 1.23. The price elasticity of demand for good X = 1.57.

The price elasticity of demand for good X = 1.57.

Question 18 What happens to total revenue (TR) if the price decreases on a product with demand that is price inelastic? Total revenue will rise. Total profit will remain the same. Total revenue will fall.

Total revenue will fall.

Question 51 pts The equation for calculating the price elasticity of demand Does not use percent change in the numerator and denominator. Takes into account slope. Uses percent change in both the numerator and denominator.

Uses percent change in both the numerator and denominator.

Question 3 If the price of organic beef steak, regular beef steak, and pork chops each increased by 10%, which of the products would you think was the most elastic? In other words, which has the most change to the quantity demanded because of the increase in price? non-organic beef steak non-organic pork chops organic beef steak

organic beef steak

Analyze the following diagram: Demand "A" represents a demand curve that is relatively elastic. perfectly inelastic. perfectly elastic.

perfectly elastic.

Analyze the following diagram:Demand "C" represents a demand curve that is perfectly inelastic. perfectly elastic. relatively inelastic.

relatively inelastic.

Question 10 Elastic supply occurs if the change in quantity supplied is ________ to a change in price. choices relatively unresponsive. the same. relatively responsive.

relatively responsive.

Question 11 Percentage change in demand using the midpoint method is calculated as the change in elasticity divided by the average quantity. quantity divided by the change in average quantity. the change in quantity divided by the average quantity.

the change in quantity divided by the average quantity.

Question 8 Price elasticity of demand is closely related, but not the same as the slope of the demand curve. The more sensitive buyers are to changes in price the demand curve becomes more curved and less linear. the more the demand curve will shift. the flatter the demand curve.

the flatter the demand curve.

Question 15 The elasticity of supply is defined as the the percentage change in price divided by the percentage change in quantity supplied. the change in quantity supplied divided by quantity supplied. the percentage change in quantity supplied divided by the percentage change in price.

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

Question 17 Which of the following factors does NOT influence the price elasticity of demand of a product? share of the consumer budget short run versus long run the slope of the supply curve

the slope of the supply curve

Question 41 pts What is the price elasticity of demand for designer shoes if for every 20% price increase shoe demand decreases by 5%. The price elasticity of demand would be -.5; inelastic -4; elastic -.25; inelastic

-.5; inelastic

Question 12 Kel loves orange soda. Unfortunately, the price has increased from $2 to $4. The percentage change in price calculated by the midpoint method is 67%. 33%. 50%.

67%.

Question 9 If you have a graph of the supply and demand for salt and calculate that the % change in quantity and % change in price is greater than 1, it is considered elastic. unitary. inelastic.

elastic.

Question 2 Joe received a promotion this year at work and now has an income which has increased by 21% since last year. Joe has now increased his quantity demanded of red wine by 7%. In this example, Joe's cross-price elasticity is 3 and the good is an inferior good. income elasticity is .33 and the good is an inferior good. income elasticity is .33 and the good is a normal good.

income elasticity is .33 and the good is a normal good.

Question 16 Which of these questions is the best example of elasticity? What is the least amount of goods a supplier can produce without upsetting the customers? How will a change in consumer behavior affect the overall consumer experience?How much will a change in price or quantity impact consumer and producer behavior?

How much will a change in price or quantity impact consumer and producer behavior?