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# quiz 3 - D For each 0.85 percent of price rise the quantity...

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T HE O HIO S TATE U NIVERSITY D EPARTMENT OF E CONOMICS E CON 200N, W INTER 2008 I NSTRUCTOR : Y U Z HOU Q UIZ T HREE J AN 22, 2008 P RINT Y OUR N AME ________KEY_____________________________________ S OCIAL S ECURITY N UMBER (O PTIONAL ) ________________________________ S IGN Y OUR N AME __________________________________________________ I NSTRUCTIONS : Y OU HAVE 12 MINUTES TO COMPLETE THE QUIZ . T HE QUIZ TOTALS 2 POINTS . Y OU HAVE 4 MULTI - CHOICE QUESTIONS AND EACH QUESTION ACCOUNTS ONE HALF POINT . P LEASE FILL IN YOUR ANSWERS INSIDE THE TABLE AT THE BOTTOM OF THIS PAGE , AND TURN IN THIS PAGE ONLY . Y OU KEEP THE QUIZ PROBLEMS . P ICK THE BEST ANSWER FOR EACH QUESTION . Problem 1 Problem 2 Problem 3 Problem 4 B C D A 1

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1, The price of a good rises by 12 percent and the price elasticity of demand for the good is 0.85. Which of the following is a correct interpretation of these facts? A), When the price rises by 12 percent, the quantity demanded decreased by 0.85 percent. B), For each 1 percent of price rise, the quantity demanded decreased by 0.85 percent. C), For each 0.85 percent of price rise, the quantity demanded decreased by 1 percent.
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Unformatted text preview: D), For each 0.85 percent of price rise, the quantity demanded decreased by 0.85 percent. 2, A hot dog vendor on a street corner wants to increase the total revenue from selling hot dogs. The price elasticity of demand for the hot dogs is 1.1. Hence the vendor will A), raise the price of a hot dog as high as possible. B), do whatever it takes to sell as many more hot dogs as possible. C), lower the price of a hot dog. D), work harder to reduce the costs of production. 3, A local pizzeria raised its price from \$9 to \$11 for each pizza and the sales of its pizza decreased from 150 to 100 per day. What is the price elasticity of demand in this case? A), 1/2 B), -2 C), -1/2 D), 2 4, If the price of a good increases from \$3 to \$4, and the quantity demand remains unchanged, then the demand is A), perfectly inelastic. B), perfectly elastic. C), somewhat elastic. D), infinite. THE END 2...
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