Chapter 05 HW - Chapter 05 Multiple Choice Identify the...

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Chapter 05 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. In general, elasticity is a measure of a. the extent to which advances in technology are adopted by producers. b. the extent to which a market is competitive. c. how firms’ profits respond to changes in market prices. d. how much buyers and sellers respond to changes in market conditions. ____ 2. Elasticity is a. a measure of how much buyers and sellers respond to changes in market conditions. b. the study of how the allocation of resources affects economic well-being. c. the maximum amount that a buyer will pay for a good. d. the value of everything a seller must give up to produce a good. ____ 3. When studying how some event or policy affects a market, elasticity provides information on the ____ 4. When studying how some event or policy affects a market, elasticity provides information on the ____ 5. When consumers face rising gasoline prices, they typically ____ 6. A 10 percent increase in gasoline prices reduces gasoline consumption by about a. 6 percent after one year and 2.5 percent after five years. b. 2.5 percent after one year and 6 percent after five years. c. 10 percent after one year and 20 percent after five years. d. 0 percent after one year and 1 percent after five years.
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____ 7. Which of the following statements about the consumers’ responses to rising gasoline prices is correct?
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