Quiz_4 - EC201 Introduction to Microeconomics (G.Lepori)...

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EC201 Introduction to Microeconomics (G.Lepori) Spring 2007 1 Quiz 4 1) For a good that is a luxury, demand a. tends to be inelastic. b. tends to be elastic. c. has unit elasticity. d. cannot be represented by a demand curve in the usual way. ANS: B 2) Other things equal, the demand for a good tends to be more inelastic, the a. fewer the available substitutes. b. longer the time period considered. c. more the good is considered a luxury good. d. more narrowly defined is the market for the good. ANS: A 3) The demand for Chocolate Chip Cookie Dough ice cream is likely quite elastic because a. ice cream must be eaten quickly. b. this particular flavor of ice cream is viewed as a necessity by many ice-cream lovers. c. the market is broadly defined. d. other flavors of ice cream are good substitutes for this particular flavor. ANS: D 4) Holding all other forces constant, when the price of gasoline rises, the number of gallons of gasoline demanded would fall substantially over a ten-year period because a. buyers tend to be much less sensitive to a change in price when given more time to react. b. buyers tend to be much more sensitive to a change in price when given more time to react. c. buyers will have substantially more income over a ten-year period. d. the quantity supplied of gasoline increases very little in response to an increase in the price of gasoline. ANS: B
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EC201 Introduction to Microeconomics (G.Lepori) Spring 2007 2 5) Suppose the price of Twinkies decreases from $1.45 to $1.25 and, as a result, the quantity of Twinkies demanded increases from 2,000 to 2,200. Using the midpoint method, the price elasticity of demand for Twinkies in the given price range is a. -2.00. b. -1.55.
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This note was uploaded on 03/30/2008 for the course ECON 201 taught by Professor C.liedholm during the Spring '07 term at Michigan State University.

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Quiz_4 - EC201 Introduction to Microeconomics (G.Lepori)...

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