# Microeconomics Study Set 20

Business

## Quiz 6 :Elasticity: The Responsiveness of Demand and Supply

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Price elasticity of demand measures
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C

Suppose the value of the price elasticity of demand is -3.What does this mean?
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B

If the percentage increase in price is 15 percent and the value of the price elasticity of demand is -3,then quantity demanded
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C

The price elasticity of demand for Stork ice cream is -4.Suppose you're told that following a price increase,quantity demanded fell by 10 percent.What was the percentage change in price that brought about this change in quantity demanded?
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If demand is inelastic,the absolute value of the price elasticity of demand is
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A demand curve which is ________ represents perfectly inelastic demand,and a demand curve which is ________ represents inelastic demand.
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If demand is perfectly inelastic,the absolute value of the price elasticity of demand is
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Jenna runs a small boutique in Capitola.She tells one of her suppliers that she is willing to pay $6 for a pair of wool hand warmers and not a dime more.On the basis of this information,what can you conclude about her price elasticity of demand for wool hand warmers? Multiple Choice Answer: Seth is a competitive body builder.He says he has to have his 12-oz package of protein powder to "feed his muscles" every day.On the basis of this information,what can you conclude about his price elasticity of demand for protein powder? Multiple Choice Answer: Figure 6-1 -Refer to Figure 6-1.The demand curve on which elasticity changes at every point is given in Multiple Choice Answer: Refer to Figure 6-1.A perfectly elastic demand curve is shown in Multiple Choice Answer: Refer to Figure 6-1.A perfectly inelastic demand curve is shown in Multiple Choice Answer: In September 2012,the average price of gasoline in the United States was$3.91 per gallon and consumers bought 5 percent less gasoline than they had during September 2011,when the average price was $3.66 per gallon.Based on these numbers,what was the price elasticity of demand for gasoline from September 2011 to September 2012? Multiple Choice Answer: If 50 units are sold at a price of$20 and 80 units are sold at a price of $15,what is the absolute value of the price elasticity of demand? Use the midpoint formula. Multiple Choice Answer: Figure 6-2 -Refer to Figure 6-2.The absolute value of the price elasticity of demand at points a and b is 1.What is the value of Pb? Multiple Choice Answer: Suppose a hurricane decreased the supply of oranges so that the price of oranges rose from$120 a ton to $180 a ton and quantity sold decreased from 800 tons to 240 tons.What is the absolute value of the price elasticity of demand? Multiple Choice Answer: Figure 6-3 -Refer to Figure 6-3.Using the midpoint formula,calculate the absolute value of the price elasticity of demand between e and f. Multiple Choice Answer: Jaycee Jeans sold 40 pairs of jeans at a price of$40.When it lowered its price to \$20,the quantity sold increased to 60 pairs.Calculate the absolute value of the price elasticity of demand.Use the midpoint formula.
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Which of the following statements about price elasticity of demand is false?
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Figure 6-4 -Refer to Figure 6-4.Which of the following statements is true about the price elasticity of demand?
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