review of chapter 04

# review of chapter 04 - Econ 221 Winter, 2008 Williamson...

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Econ 221 Winter, 2008 Williamson Review of Chapter #4 (Elasticity) 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) 0.03 B) 0.30 C) 0.333 D) 3 E) 30 2. If the price elasticity of demand for pineapple is 0.75, a 4% increase in the price of pineapple will lead to a A) 3% decrease in the quantity demanded of pineapple B) 3% increase in the quantity demanded of pineapple C) 4% decrease in the quantity demanded of pineapple D) 3/16% increase in the quantity demanded of pineapple E) 16/3% decrease in the quantity demanded of pineapple 3. The demand for a good is elastic with respect to price if the price elasticity of demand is A) equals one B) greater than one C) less than one D) equals negative one E) zero 4. When the price of hot dog 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

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## This note was uploaded on 02/07/2011 for the course ECON 221 taught by Professor Williamson during the Fall '05 term at Cal Poly.

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review of chapter 04 - Econ 221 Winter, 2008 Williamson...

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