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1.
If the percentage change in quantity demanded is less than the corresponding percentage change in price, demand is price _________.
A)inelastic
B)elastic
C)unit elastic
D)perfectly elastic
E)perfectly inelastic
2.
If the quantity demanded of water rises 7 percent when the price of water declines 10 percent, then the price elasticity of demand is:
A)0.7
B)1.4
C)-0.7
D)-1.4
E)3.0
3.
Which of the following goods is most likely to have an inelastic demand in the short run?
A)Residential electricity service.
B)Gasoline sold at Chevron gas stations.
C)Milk sold at Kroger.
D)Wheat grown by farmer Brown.
E)Imported BMWs.
4.
If demand for smooth top electric ovens is unit elastic, then lowering the price will cause
A)total revenues to fall.
B)total expenditures to rise.
C)profits to fall.
D)total expenditures to fall.
E)no change in total revenues.
5.
The demand for a specific brand of juice will be _______ the demand for juice in general.
A)more elastic than
B)less elastic than
C)as elastic as
D)as inelastic as
E)as unit elastic as
6.
Which of the following relationships is true?
A)Total revenues frequently exceed total expenditures.
B)Total expenditures frequently exceed total revenues.
C)The ratio of total expenditures to total revenues is exactly equal to one.
D)The ratio of total expenditures to total revenues is more than one.
E)The ratio of total expenditures to total revenues is less than one.
7.
Suppose the cross elasticity of demand between gadgets and widgets is negative. Apparently, the two goods are
A)substitutes.
B)normal.
C)inferior.
D)complements.
E)inelastic.
8.
Which of the following is most likely to have a negative income elasticity of demand?
A)Generic drugs.
B)Luxurious overseas vacations.
C)Fancy French restaurant meals.
D)New SUVs.
E)New computers.
9.
A vertical supply curve reflects __________.
A)perfectly elastic supply
B)unit elastic supply
C)perfectly inelastic supply
D)perfectly unit elastic supply
E)perfectly cross unit elastic supply
10.
Suppose that the supply curve for muffins has a slope of 2. The price elasticity of supply is thus
A)0
B)1
C)2
D)0.5
E)Not enough information to answer the question





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