Ch4_Practice_Test_Questions

Ch4_Practice_Test_Questions - 4 Chapt ELASTICITYe r Price...

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4 Price Elasticity of Demand Topic: The Price Elasticity of Demand Skill: Conceptual 1) The slope of a demand curve depends on A) the units used to measure price and the units used to measure quantity. B) the units used to measure price but not the units used to measure quantity. C) the units used to measure quantity but not the units used to measure price. D) neither the units used to measure price nor the Answer: A Topic: The Price Elasticity of Demand Skill: Conceptual 2) The price elasticity of demand depends on A) B) C) D) Answer: D Topic: The Price Elasticity of Demand Skill: Recognition 3) The price elasticity of demand measures A) how often the price of a good changes. B) the slope of a budget curve. C) how sensitive the quantity demanded is to changes in demand. D) the responsiveness of the quantity demanded to changes in price. Answer: D Topic: Calculating Elasticity Skill: Conceptual 4) When the quantity of coal is measured in kilo- grams instead of pounds, the demand for coal becomes A) more elastic. B) less elastic. C) neither more nor less elastic. D) undefined. Answer: C Topic: Calculating Elasticity Skill: Recognition 5) The price elasticity of demand equals A) the change in the price divided by the change in quantity demanded. B) the change in the quantity demanded divided by the change in price. C) the percentage change in the price divided by the percentage change in the quantity deman- ded. D) ded divided by the percentage change in the price. Answer: D Topic: Calculating Elasticity Skill: Analytical 6) If a rightward shift of the supply curve leads to a 6 percent decrease in the price and a 5 per- cent increase in the quantity demanded, the price elasticity of demand is A) 0.30. B) 0.60. C) 0.83. D) 1.20. Answer: C 135 C h a p t e r
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1 3 6 C H A P T E R 4 Topic: Calculating Elasticity Skill: Analytical 7) A 10 percent increase in the quantity of spin- ach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is A) 0.5. B) 2.0. C) 10.0. D) 20.0. Answer: A Topic: Calculating Elasticity Skill: Analytical 9) Suppose a rise in the price of peaches from $5.50 to $6.50 per bushel decreases the quant- ity demanded from 12,500 to 11,500 bushels. The price elasticity of demand is A) 0.5. B) 1.0. C) 2.0. D) 1000.0. Answer: A Topic: Calculating Elasticity Skill: Analytical 10) A fall in the price of lemons from $10.50 to $9.50 per bushel increases the quantity deman- ded from 19,200 to 20,800 bushels. The price elasticity of demand is A) 0.80. B) 1.20. C) 1.25. D) 8.00. Answer: A Topic: Calculating Elasticity Skill: Analytical 11) A fall in the price of cabbage from $10.50 to ded from 18,800 to 21,200 bushels. The price elasticity of demand is A) 0.80. B) 1.20. C) 1.25. D) 8.00. Answer: B Topic: Calculating Elasticity Skill: Analytical 12) Suppose that the quantity of root beer deman- ded declines from 103,000 gallons per week to 97,000 gallons per week as a consequence of a 10 percent increase in the price of root beer.
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This note was uploaded on 06/15/2011 for the course ECON 221 taught by Professor Gordanier during the Spring '08 term at South Carolina.

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Ch4_Practice_Test_Questions - 4 Chapt ELASTICITYe r Price...

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