Micro Chapter 6 Quiz
The table given below reports the price and quantity demanded of a commodity. According to Table 6.1, when the price increases from $5 to $6, the price elasticity of demand is _____.
1.67
If the price elasticity of supply is 0.75, it would imply that a _____.
120 percent increase in price would increase the quantity supplied by 90 percent
Acme Tools manufactures anvils, a forging tool. When the price of anvils was increased from $7 to $13, Acme Tools was willing and able to increase production from 1 to 4 units per day. Using the midpoint formula, what is Acme's price elasticity of supply for anvils?
2
If 12 candy bars are demanded at $0.30 each and 4 candy bars are demanded at $0.50 each, what is the elasticity of demand over the price range from $0.30 to $0.50?
2
Assume that the price elasticity of demand for a commodity is 0.20. A 10 percent increase in the price of the commodity will be followed by a:
2 percent decrease in the quantity demanded.
What would be the consequence of a 10 percent decrease in the price of a good for which price elasticity of demand is 5?
A 50 percent increase in the quantity demanded
Which of the following goods is likely to have an income elasticity of demand that is less than zero?
A box of generic macaroni and cheese dinner
Goods whose income elasticity of demand is greater than zero are _____.
Normal Goods
Which of the following situations is represented by a nearly horizontal supply curve for a good?
Small changes in the price of the good lead to large changes in the quantity supplied of the good.
The figure given below shows the demand curves for five products: A, B, C, D, and E. Refer to Figure 6.1. Which of the following is true of the demand curve for A?
There is no change in the quantity demanded of A as the price changes.
If the demand for corn is elastic, then:
a decrease in price will reduce total revenue for corn producers.
Demand for a good becomes more elastic as:
a good makes up a larger percentage of a consumer's budget.
When the price of hot dogs at the supermarket increases, the quantity demanded of hot dog buns declines. This situation describes:
c. the negative cross-price elasticity of demand for hot dogs and hot dog buns.
Price elasticity of demand is the sole determinant of profit for a firm.
false
The figure given below shows the demand curves for five products: A, B, C, D, and E. Refer to Figure 6.1. The demand curve B is:
less elastic compared to demand curve C.
When product A is a substitute for product B, the cross-price elasticity of demand for products A and B will be _____.
positive
If = -1.50 for a good, and price of the good decreases by 20 percent, then:
quantity demanded will increase by 30 percent.
Since an expensive sports car constitutes a greater portion of a consumer's budget than does laundry soap, the price elasticity of demand for an expensive sports car is _____.
relatively more elastic
When the manager of a local movie theater raises the price of movie tickets from $7.50 to $8.50, his total revenue falls. This means that:
the demand for movie tickets is highly elastic.
A 0.5% increase in the price of a particular product causes the quantity demanded of the product to drop to zero. This means that the price elasticity of demand for the product is:
perfectly elastic.