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1 | |
The demand curve: |
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| | A) | Slopes down and to the right. |
| | B) | Shows that a negative relationship exists between price and quantity demanded. |
| | C) | Shows the quantity demanded at each specific price. |
| | D) | All the above. |
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2 | |
All the following are complementary goods except: |
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| | A) | Beer and peanuts |
| | B) | Tea and coffee |
| | C) | Printers and paper |
| | D) | Tennis balls and tennis rackets |
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3 | |
The demand for an inferior good: |
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| | A) | Increases as income increases. |
| | B) | Decreases as income increases. |
| | C) | Increases as the price of the good falls. |
| | D) | Is not affected by changes in either income or price. |
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4 | |
All the following will cause the demand curve to shift to the left except: |
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| | A) | A reduction in income if the good is normal. |
| | B) | An increase in the price of a complementary good. |
| | C) | An increase in the price of a substitute good. |
| | D) | Consumer tastes change, so they no longer want the good. |
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5 | |
Suppose that there is an increase in the demand for beer. This increase in demand could have been caused by: |
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| | A) | An increase in the price of beer. |
| | B) | The price of wine, a substitute, increases. |
| | C) | Consumers' tastes change so that they prefer wine more than beer. |
| | D) | A lack of rain results in a shortage of water. |
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6 | |
Given the following four possibilities, which one results in an increase in total revenue? |
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| | A) | Demand is unitary elastic and price falls. |
| | B) | Demand is elastic and price rises. |
| | C) | Demand is inelastic and price falls. |
| | D) | Demand is inelastic and price rises. |
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7 | |
If the price elasticity of demand for a particular good is greater than zero but less than one, then the: |
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| | A) | Percentage change in quantity demanded is greater than the percentage change in price. |
| | B) | Price is above the midpoint on the demand curve if the demand curve is linear. |
| | C) | Percentage change in quantity demanded equals the percentage change in price. |
| | D) | Percentage change in price is greater than the percentage change in quantity demanded. |
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8 | |
Which of the following will affect a good's price elasticity of demand? |
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| | A) | The number of substitute goods available. |
| | B) | The period of time available to adjust to a price change. |
| | C) | The ease of substitution between goods. |
| | D) | All of the above. |
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9 | |
Suppose that the price elasticity of demand for petrol is 2.0 when suddenly petrol prices increase by 15 percent. The quantity demanded changes by: |
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| | A) | 15% |
| | B) | 20% |
| | C) | 30% |
| | D) | 10% |
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10 | |
An increase in total revenue that results from an increase in the price of Indian takeaway curry suggests that the demand for curry is: |
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| | A) | Inelastic |
| | B) | Eelastic |
| | C) | Unitary elastic |
| | D) | Perfectly elastic |
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11 | |
For luxury goods, demand increases as price increases. |
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| | A) | TRUE |
| | B) | FALSE |
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12 | |
If consumers expect prices to rise in the future, then the demand curve will shift to the right now. |
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| | A) | TRUE |
| | B) | FALSE |
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13 | |
For a normal good, demand falls during a recession. |
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| | A) | TRUE |
| | B) | FALSE |
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14 | |
Consumer surplus is the excess of products bought by consumers during a sale. |
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| | A) | TRUE |
| | B) | FALSE |
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15 | |
Steeper demand lines are more inelastic. |
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| | A) | TRUE |
| | B) | FALSE |
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16 | |
When demand is elastic a __________ in price will lead to an _____________ in total revenue. |
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| | A) | Decrease, increase |
| | B) | Decrease, decrease |
| | C) | Increase, increase |
| | D) | Increase, decrease |
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17 | |
If a 10% change in the price leads to a 25% change in quantity demanded, then the elasticity of demand is _____________. |
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| | A) | 1 |
| | B) | 0 |
| | C) | 2.5 |
| | D) | 0.25 |
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18 | |
Income rises, the demand for the complement of an income normal good _________. |
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| | A) | Decreases |
| | B) | Increases |
| | C) | Remains the same. |
| | D) | Falls, but only in the short run. |
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19 | |
At the mid point of a linear demand line, the elasticity of demand is __________. |
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| | A) | 0 |
| | B) | 0.5 |
| | C) | 1 |
| | D) | 1.5 |
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20 | |
If demand is perfectly inelastic at all prices, a 10% change in price will change demand by ___ %. |
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| | A) | 10 |
| | B) | 5 |
| | C) | 20 |
| | D) | 0 |