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1 | |
The price elasticity of demand measures: |
| | A) | the change in quantity demanded of a good given a change in income. |
| | B) | the change in quantity demanded of a good given a change in the price of another good. |
| | C) | the change in the quantity demanded of a good given a change in the price of the good. |
| | D) | the change in the quantity demanded of a good given a change in the price elasticity of supply. |
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2 | |
If a good has price-inelastic demand, |
| | A) | a 1 percent increase in price produces less than a 1 percent decrease in the quantity demanded. |
| | B) | a 1 percent increase in price produces less than a 1 percent increase in the quantity demanded. |
| | C) | a 1 percent increase in price produces more than a 1 percent increase in the quantity demanded. |
| | D) | a 1 percent increase in price produces more than a 1 percent decrease in the quantity demanded. |
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3 | |
When the price is 5, the quantity demanded is 10. When the price is 7, the quantity demanded is 5. What is the price elasticity of demand? |
| | A) | 1 |
| | B) | 0.5 |
| | C) | 0.33 |
| | D) | 2 |
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4 | |
A perfectly inelastic demand curve will be ______ on a graph while a perfectly elastic demand curve will be ______ on a graph. |
| | A) | vertical; horizontal |
| | B) | horizontal; vertical |
| | C) | vertical; vertical |
| | D) | horizontal; horizontal |
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5 | |
P x Q = |
| | A) | MC |
| | B) | TR |
| | C) | MR |
| | D) | TC |
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6 | |
When demand is price-inelastic, a price decrease will result in: |
| | A) | an increase in total cost. |
| | B) | an increase in total revenue. |
| | C) | a decrease in total cost. |
| | D) | a decrease in total revenue. |
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7 | |
The practice of charging different prices to different buyers is called: |
| | A) | total revenue. |
| | B) | price discrimination. |
| | C) | price elasticity. |
| | D) | an increase in demand. |
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8 | |
A percentage change in quantity supplied divided by a percentage change in price is called: |
| | A) | income elasticity. |
| | B) | price elasticity of demand. |
| | C) | price elasticity of supply. |
| | D) | elasticity of substitution. |
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9 | |
When the price is 5, the quantity supplied is 10. When the price is 10, the quantity supplied is 20. What is the price elasticity of supply? |
| | A) | 1 |
| | B) | 0.5 |
| | C) | 0.33 |
| | D) | 2 |
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10 | |
When governments restrict agricultural production, the supply curve to shifts to the _______, the equilibrium price ______, and the result is ______ revenue for farmers. |
| | A) | right; decreases; higher |
| | B) | left; decreases; higher |
| | C) | left; increases; lower |
| | D) | left; increases; higher |
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11 | |
The burden of a gasoline tax will be borne mostly by _______ because the demand curve is relatively _______. |
| | A) | producers; inelastic |
| | B) | producers; elastic |
| | C) | consumers; inelastic |
| | D) | consumers; elastic |
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12 | |
In order to show the imposition of a tax on a supply and demand graph, shift the supply curve ______. In order to show the imposition of a subsidy on a supply and demand graph, shift the supply curve ______. |
| | A) | upward; upward |
| | B) | downward; upward |
| | C) | upward; downward |
| | D) | downward; upward |
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13 | |
If demand is inelastic relative to supply, most of the burden of a tax will be borne by ______. |
| | A) | consumers |
| | B) | producers |
| | C) | firms |
| | D) | none of the above |
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14 | |
When the minimum wage is raised, we would expect that unemployment ______, but if demand for labor is relatively inelastic, revenues of low-wage workers will ______ after the minimum wage increase. |
| | A) | increases; increase |
| | B) | increases; decrease |
| | C) | decreases; increase |
| | D) | decreases; decrease |
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15 | |
Price ceilings generally lead to: |
| | A) | unemployment. |
| | B) | shortages. |
| | C) | surpluses. |
| | D) | none of the above. |
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