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# Economics Study Set 8

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## Quiz 6 : Describing Supply and Demand: Elasticities

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

False

The price elasticity of supply is the:
Free
Multiple Choice

B

Price elasticity of demand is the:
Free
Multiple Choice

D

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
Demand is said to be elastic when the:
Multiple Choice
Refer to the following graph. Since the supply curve intersects the horizontal axis, all the points along the supply curve shown are inelastic.
True False
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
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:
Multiple Choice
When demand is perfectly inelastic, there is no change in quantity demanded after a change in price.
True False
Revenue remains unchanged along a straight-line demand curve.
True False
Refer to the following graph. If price is currently at B and rises, total revenue will rise.
True False
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
Supply is said to be inelastic when the:
Multiple Choice
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:
Multiple Choice
If the amount of land supplied remains the same even when the price of land increases, the:
Multiple Choice
In general, the greater the elasticity, the:
Multiple Choice