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Flash Quiz
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1.
The most important factor in determining the likely size of the price elasticity of demand for a particular good is
A)if the good is a necessity.
B)the number and closeness of substitute goods.
C)the amount of income spent on the good.
D)the usefulness of the good.
E)if the good is a luxury.
2.
Given the following demand curve, P = 100 – 5 x Q, the absolute value of the price elasticity of demand when P = $20 is
A)80
B)5
C)0.5
D)0.25
E)0.2
3.
Suppose that Juan buys 10 gallons of milk each month when the price per gallon is $3, while when milk goes on sale for $2 he buys 15 gallons each month. What is Juan's price elasticity of demand for milk at $2?
A)1.
B)0.25.
C)0.50.
D)0.67.
E)0.75
4.
A coefficient of 2 for the price elasticity of demand means that __________.
A)a 10 percent reduction in price will lead to a 20 percent decrease in quantity demanded.
B)a 20 percent increase in price will lead to a 10 percent decrease in quantity demanded.
C)a 20 percent decrease in price will lead to a 10 percent increase in quantity demanded.
D)a 10 percent reduction in price will lead to a 20 percent increase in quantity demanded.
E)none of the above.
5.
A(n) _________ demand curve is perfectly elastic.
A)downward-sloping
B)vertical
C)horizontal
D)upward-sloping
E)45 degree
6.
When Jack lowers the price of his lemonade from $1.50 to $1.00 per cup, his total revenue from selling lemonade drops. Based on this information, we can conclude that the price elasticity of demand for Jack's lemonade is _________.
A)inelastic
B)elastic
C)unit elastic
D)perfectly elastic
E)inferior
7.
Which portion of a straight-line demand curve has the lowest price elasticity of demand?
A)The top part.
B)The middle part.
C)The bottom part.
D)The origin point, where price and quantity intersect.
E)None of the above, as elasticity is constant along a straight-line demand curve.
8.
Suppose that price of each of the goods listed below rises by 50 percent. Which of them is most likely to experience less than a 50 percent decrease in quantity demanded?
A)Imported sport utility vehicles.
B)Meals at fancy French restaurants.
C)Italian designer clothing.
D)Table salt.
E)Gasoline sold at Chevron gas stations.
9.
Which of the following pairs of goods is most likely to have the larger cross elasticity of demand?
A)Coke and Pepsi.
B)Computer hardware and computer software.
C)Lawn mowers and gasoline.
D)Cough drops and house paint.
E)SUVs and gasoline.
10.
Suppose that price of a good increases by 70 percent. In which of the following time periods is the resulting increase in quantity supplied most likely to be the largest?
A)Immediately after the price increase.
B)One week after the price increase.
C)Six months after the price increase.
D)One year after the price increase.
E)Two years after the price increase.





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