 |
1 | |
The price elasticity of demand measures ________________ |
|
| | A) | the responsiveness of quantity demanded to a change in price |
| | B) | how far a demand curve shifts |
| | C) | a change in price |
| | D) | a change in quantity demanded |
|
2 | |
If demand is ___________ then price cuts will __________ spending |
|
| | A) | inelastic, increase |
| | B) | elastic, increase |
| | C) | elastic, decrease |
| | D) | none of the above |
|
3 | |
Positive cross-elasticities suggest that goods are _________ and negative cross-elasticities that goods are ___________ |
|
| | A) | substitutes, inferior |
| | B) | normal, complements |
| | C) | substitutes, complements |
| | D) | normal, inferior |
|
4 | |
A measurement showing how quantity demanded varies with income is the |
|
| | A) | price elasticity of demand |
| | B) | cross-price elasticity of demand |
| | C) | budget elasticity of demand |
| | D) | income elasticity of demand |
|
5 | |
Inferior goods have ___________ and luxury goods have ____________ |
|
| | A) | negative income elasticities, income elasticities greater than 1 |
| | B) | income elasticities greater than 1, negative income elasticities |
| | C) | positive income elasticities, negative income elasticities |
| | D) | none of the above |
|
6 | |
If your income doubles and the prices of the goods you buy double, then your demand for these goods will likely ________ |
|
| | A) | increase |
| | B) | not change |
| | C) | decrease |
| | D) | shift |
|
7 | |
When we describe who eventually bears the burden of a tax, we are referring to the |
|
| | A) | rate of tax |
| | B) | burden of tax |
| | C) | incidence of tax |
| | D) | equity of tax |
|
8 | |
A vertical supply curve has an elasticity of supply of ________ |
|
| | A) | one |
| | B) | infinity |
| | C) | negative one |
| | D) | zero |
|
9 | |
When a linear demand curve has a price elasticity of infinity it will appear ______ |
|
| | A) | horizontal |
| | B) | vertical |
| | C) | downward sloping to the left |
| | D) | as a rectangular hyperbola |
|
10 | |
The cross-price elasticity of demand measures how the quantity demanded of one good is related to consumer income |
|
| | A) | TRUE |
| | B) | FALSE |
|
11 | |
The supply elasticity measures the responsiveness of quantity supplied to quantity demanded |
|
| | A) | TRUE |
| | B) | FALSE |
|
12 | |
The incidence of a tax is determined by the relative slopes of supply and demand |
|
| | A) | TRUE |
| | B) | FALSE |
2002 A McGraw-Hill Online Learning Centre