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Economics Study Set 8

Business

Quiz 6 :

Describing Supply and Demand: Elasticities

Quiz 6 :

Describing Supply and Demand: Elasticities

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Most likely, the elasticity of demand for transportation is greater than the elasticity of demand for cars.
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True False
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Answer:

False

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The price elasticity of supply is the:
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Multiple Choice
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Answer:

B

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Price elasticity of demand is the:
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D

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If demand is highly inelastic and supply shifts to the right, the equilibrium price will rise significantly while quantity will increase only slightly.
True False
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Demand is said to be elastic when the:
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Refer to the following graph. img Since the supply curve intersects the horizontal axis, all the points along the supply curve shown are inelastic.
True False
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If the price of a good goes up by 20 percent and the quantity demanded falls by 40 percent, the price elasticity of demand is 2.
True False
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The short-run elasticity of demand for gasoline sold at gasoline stations is 0.20. If terrorism causes the supply of gasoline to fall, resulting in a 5 percent drop in quantity, and other things remain the same, the price per gallon will increase by:
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When demand is perfectly inelastic, there is no change in quantity demanded after a change in price.
True False
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Revenue remains unchanged along a straight-line demand curve.
True False
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Refer to the following graph. img If price is currently at B and rises, total revenue will rise.
True False
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When the demand curve is highly inelastic, there is a strong incentive for suppliers to find a way to collectively reduce the quantity sold in the market and raise the price of the product.
True False
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Supply is said to be inelastic when the:
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If average movie ticket prices rise by about 5 percent and attendance falls by about 2 percent, other things being equal, the elasticity of demand for movie tickets is about:
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If the amount of land supplied remains the same even when the price of land increases, the:
Multiple Choice
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In general, the greater the elasticity, the:
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Price elasticity of demand is the percentage change in price divided by the percentage change in quantity demanded.
True False
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The cross-price elasticity of demand is the percentage change in price divided by the percentage change in the price of another good.
True False
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If the price of corn goes up by $1 a bushel and the quantity supplied rises by 100 bushels, the price elasticity of supply has to be 100.
True False
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If quantity demanded falls by 25 percent when price rises by 50 percent, demand is said to be:
Multiple Choice
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