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Multiple Choice Quiz
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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 of wine rises by 7 percent when the price of wine declines by 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)Household electricity consumption.
B)Motor fuel sold at service stationsoperated by one supplier (e.g., Esso, Q8).
C)Milk sold through one supermarket chain.
D)Wheat grown by a single farmer.
E)BMWs.
4.
If demand for ceramic hob electric cookers 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 fruit 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 (of producers of a good) frequently exceed total expenditures (by consumers of the good).
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 price 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 foreign holidays.
C)Gourmet 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.
Given that the supply curve for widgets is P = 2Q, then the price elasticity of supply is:
A)0
B)1
C)2
D)0.5
E)Not enough information to answer the question





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