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Unformatted text preview: !"#$%"& ) *+, )./0 1&2 345"46" 78&8968 1:* 13;*< ,+;,=*> )? @AB,>;3;< ;!@7 B1C C@D* @7 E,:> B*>7,3D +,BE ,C ;!* !,A*F,>G 31 7!,:D1 ,DE =* :7*1 ;, F,>G ;!* H:*7;@,7 ,:;2 1, ,; 7:=A@; ;!@7 C@D* F@;! E,:> 37F*>72 1, ,; :7* 3 7+3;>, 7!**;2 !,A*F,>G 7:=A@77@,7 F@DD ,DE =* 3++*B;*1 ;!>,:I! ;!* 377*77A*; D@G , :D*3>2 BD*37* >*A*A=*> ;!3; ;!* ,>1*> ,C ;!* 37F*>7 @ ;!@7 J*>7@, A3E 1@CC*> C>,A ;!* ,>1*> ,C ;!* 37F*>7 @ :D*3>2 1. The price elasticity of demand measures the responsiveness of the change in: A) quantity demanded to a change in price. B) price to a change in quantity demanded. C) the slope of the demand curve to a change in price. D) the slope of the demand curve to a change in quantity demanded. Use the following to answer question 2. Figure: Demand for Shirts 2. (Figure: Demand for Shirts) The price elasticity of demand for the segment AB, using the midpoint method, is: A) 13. B) 11. C) 0.91. D) 0.1. 3. When the price of pencils decreases from $3 to $1, the quantity demanded increases from 100 to 200 pencils. Using the midpoint method, the price elasticity of demand equals ________. A) 1/6 B) 1/2 C) 2/3 D) 3/2 4. On a linear demand curve: A) demand is elastic at high prices. B) demand is inelastic at high prices. C) elasticity is the same at all points on the demand curve. D) demand is elastic at low prices. 5. If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when the price of shirts increases from $8 to $12, then, for you, shoes and shirts are considered: A) inferior goods. B) luxury goods. C) substitute goods. D) complementary goods. Use the following to answer question 6. 6. (Table: Johnson's Income and Expenditures) Johnson's income elasticity of demand for magazines is: A) negative. B) 0. C) greater than 0 but less than 1. D) 1. 3. When the price of pencils decreases from $3 to $1, the quantity demanded increases from 100 to 200 pencils. Using the midpoint method, the price elasticity of demand equals ________. A) 1/6 B) 1/2 C) 2/3 D) 3/2 4. On a linear demand curve: A) demand is elastic at high prices. B) demand is inelastic at high prices. C) elasticity is the same at all points on the demand curve. D) demand is elastic at low prices. 5. If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when the price of shirts increases from $8 to $12, then, for you, shoes and shirts are considered: A) inferior goods....
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 Fall '06
 Banzhaf
 Microeconomics

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