5

16. Refer to Figure 5-1. With reference to Graph B, at a price of $5, total revenue equals: A, $150 B. $250 C. $300. D. $200

$250

18. The demand for a product is unit elastic. At a price of $20, 10 units of a product are sold. If the price is increased to $40, then one would expect sales to equal: A. 20 units B. 10 units. C. 5 units. D. 0 units.

A. 20 units

3. Demand is sa id to bewhen the quantity demanded is very responsive to changes in price. A. elastic B. unit elastic C. inelastic D. independent

A. elastic

10. If the demand curve is perfectly elastic, then an increase in supply will: decrease the price but result in no change in the quantity exchanged. B. increase the quantity exchanged but result in no change in the price C. increase the price but result in no change in the quantity exchanged. D. increase both the price and the quantity exchanged.

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

Demand is said to be when the quantity demanded is not very responsive to changes in price. A.independent B. inelastic C. unit elastic D. elastic

B. inelastic

5. Demand is said to bewhen the quantity demanded changes at the proportion as the price. elastic B. unit elastic C. inelastic D. independent

B. unit elastic

14. Refer to Figure 5-1. With refe rence to Graph A, at a price of $10, total revenue equals: A. $1,000 B. $500 C. $400 D. $200

C. $400

6. The elasticity of demand is defined as the percentage change in quantity demanded divided the percentage change in A. quantity supplied B. the slope of the demand curve C. price D. the slope in the supply curve

C. price

1. The price elasticity of demand measures the: A. responsiveness of quantity demanded to a change in quantity supplied B. responsiveness of price to a change i quantity demanded. C. responsiveness of quantity demanded to a change in price D. responsiveness of quantity demanded to a change in income.

C. responsiveness of quantity demanded to a change in price

15. Refer to Figure 5-1. With reference to Graph A, at a price of $5, total revenue equals: A. $200. B. $400 C.$500 D S 1,000

C.$500

Price elasticity of demand is defined as: A. the slope of the demand curve. B. the slope of the demand curve divided by the price C the percentage change in price divided by the percentage change in quantity demanded. D, the percentage change in quantity demanded divided by the percentage change in price.

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

13. A price cut will increase the total revenue a firm receives if the demand for its product A. unit inelastic. B. unit elastic. C. inelastic. D. elastic.

D. elastic.