Chapter 4 - Chapter 4 Student 1 If the price of cheese...

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Chapter 4 Student: ___________________________________________________________________________ 1. If the price of cheese falls by one percent and the quantity demanded rises by 3 percent, then the price elasticity of demand for cheese has a value of A. 30. B. 0.30. C. 0.333. D . 3. 2. Price elasticity of demand is often expressed as a positive number because A. using the formula yields a positive number. B. demand has a positive slope. C . it's convenient to use absolute values even though the formula yields non-positive numbers. D. both the numerator and the denominator in the formula are negative. 3. If the price elasticity of demand for football game ticket is 2, if the price increases by 1% quantity demanded decreases by A. ½%. B. 1%. C . 2%. D. 4%. 4. If a 10% decrease in the price of good leads to a 20% increase in the quantity demanded of that good, the price elasticity of demand for that good would be A. ½. B . 2. C. 10. D. 20. 5. If the price elasticity of demand for a good is greater than one, then the demand for that good, with respect to price, is A . elastic. B. inelastic. C. unitary elastic. D. perfectly elastic.
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6. When the price of hot dogs is $1.50 each, 500 hot dogs are sold every day. After lowering the price to $1.35 each, 510 hot dogs are sold every day. At the original price, what is the price elasticity of demand for hot dog? A. 66.67 B. 5 C. 2 D . 0.2 7. If consumers respond to a 10% price reduction by buying twice as much, we would conclude that A. there was excess demand at the original price. B. there was excess supply at the original price. C . the absolute value of price elasticity at the original price was greater than one. D. the absolute value of price elasticity at the original price was less than one. 8. If the of demand for a good is elastic, that good is likely to have A. many close complements. B. few close complements. C . many close substitutes. D. few close substitutes. 9. For which of the following products is demand likely to be least price elastic? A. frozen food B. soft drinks C . groceries D. Diet Coke 10. If the price is $2.00 in both locations, the price elasticity of demand for a candy bar at an airport is likely to be _________ the price elasticity of demand for a candy bar in a grocery store. A . less than B. equal to C. greater than D. the reciprocal of 11. Satellite TV is a close substitute for cable TV. In the 1990's small satellite TV units were developed that made it more practical for individual consumers to subscribe to Satellite TV service. This caused the price elasticity of demand for cable TV service to A. become more inelastic. B. become less elastic. C. become more elastic. D. shift to the left.
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12. Big-ticket items such as refrigerators have a _____ price elasticity of demand compared to low budget items such as paper towels. A
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Chapter 4 - Chapter 4 Student 1 If the price of cheese...

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