Exam+01+Prep+Chapter+04

Exam+01+Prep+Chapter+04 - Exam 1 Prep Questions for Chapter...

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Exam 1 Prep Questions for Chapter 4 1) Suppose the price of burgers increases from $2 to $3 each. The degree to which quantity demanded responds to this price increase depends on the A) the price elasticity of supply. B) income elasticity of demand. C) cross elasticity of demand. D) price elasticity of demand. Topic: Price Elasticity of Demand 2) As Mary's income increases by 20 percent, her demand for tickets to National Hockey League games increases by 10 percent. Mary's demand for tickets is income ________; for Mary, hockey tickets are ________ good. Topic: Income Elasticity of Demand 3) Along a straight-line demand curve, as the price falls the Topic: Elasticity Along a Straight - Line Demand Curve 4) In the above figure, the price elasticity of supply at any given quantity is Topic: Elasticity of Supply 1
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5) If the supply for a good is elastic, that means that when price increases, the A) quantity supplied will increase by a smaller percentage than the price increased. B) quantity supplied will decrease. C) quantity supplied will increase by a greater percentage than the price increased. D) supply will increase. Topic: Inelastic and Elastic Supply 6) If a consumer is relatively insensitive to changes in the price of a good, then the consumer's demand for the good is Topic: Inelastic and Elastic Demand 7) If the cross elasticity of demand for good x with respect to the price of good y is positive, then goods x and y are Topic: Cross Elasticity of Demand 8) A decrease in the price of eggs from $1.50 to $1.30 per dozen resulted in an increase in egg purchases in two cities. In Philadelphia, daily egg purchases increased from 6000 to 8000 dozens; in nearby Dover, Delaware, daily egg purchases increased from 300 to 400 dozens. The price elasticity of demand is therefore Topic: Calculating Elasticity
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