Pre-Test Chap 06 e18 - Pre-Test Chap 06 e18 Student:

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Pre-Test Chap 06 e18 Student: ___________________________________________________________________________ 1. What is the most likely effect of the development of television, videocassette players, and rental movies on the movie theater industry? A. Decreased costs of producing movies B. Increased demand for movie theater tickets C. Movie theater tickets become an inferior good D. Increased price elasticity of demand for movie theater tickets 2. Tickets to a university football game always sell out. In this case, the: A. Demand for tickets is highly inelastic B. Demand for tickets is highly elastic C. Supply of tickets is highly inelastic D. Supply of tickets is highly elastic 3. If a product has a short-run elasticity of supply equal to zero, then an increase in the demand for the product will: A. Have no effect on price or quantity sold B. Increase price and leave quantity sold unchanged C. Increase price and reduce the quantity sold to zero D. Leave the price unchanged and reduce the quantity sold Answer the next question(s) based on the following table. 4. Refer to the above table. The price elasticity of demand in the range from $4 to $3 is: A. 1.25 B. 1.00 C. .75 D. .50 5. The Mear Corporation finds that its total spending on machine parts increases after the price of machine parts falls, other things being equal. Which of the following is true about the Mear Corporation's demand for machine parts with the price change? A. It is unit elastic B. It is price elastic C. It is price inelastic D. It is perfectly inelastic
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6. Suppose the price elasticity of supply for crude oil is 2.5. How much would price have to rise to increase production by 20 percent? A. 8 percent B. 12.5 percent C. 20 percent D. 45 percent 7. An increase in the price of tickets to a popular sporting event will increase total revenue if: A. There are many substitutes for the product B. The ticket is considered to be a luxury
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