TEST 3 - TEST 3 Submitted by ylee10 on 5/24/2009 6:53:40 PM...

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Unformatted text preview: TEST 3 Submitted by ylee10 on 5/24/2009 6:53:40 PM Points Awarded 40 Points Missed 4 Percentage 91% 1. If the demand for a good is inelastic , then when the price of that good changes, other things being equal, the total revenue of sellers A. is unaffected. B. changes in the same direction as the price change. C. changes in the opposite direction from the price change. D. decreases regardless of the direction of the change in price. Points Earned: 0/1 Correct Answer: B Your Response: A 2. If the demand for a good is inelastic and the price of the good decreases, A. total revenue decreases. B. total revenue increases. C. total revenue is not affected. D. the effect on total revenue can't be determined. Points Earned: 1/1 Correct Answer: A Your Response: A 3. If the percentage change in quantity demanded of a good is equal to the percentage change in price, the demand is A. elastic. B. inelastic. C. unit elastic. D. perfectly elastic. Points Earned: 1/1 Correct Answer: C Your Response: C 4. Total revenue is A. price minus quantity. B. price multiplied by quantity. C. price divided by quantity. D. quantity divided by price. Points Earned: 1/1 Correct Answer: B Your Response: B 5. Bus companies that try to lower fares in order to increase revenue must believe that the demand for bus service is A. inelastic. B. elastic. C. unit elastic. D. perfectly elastic. Points Earned: 1/1 Correct Answer: B Your Response: B 6. Elasticity is a measure of the responsiveness of quantity demanded to changes in A. supply. B. price. C. quantity supplied. D. demand. Points Earned: 1/1 Correct Answer: B Your Response: B 7. The demand for a good tends to be less elastic A. the fewer substitutes there are for the good. B. the longer the time period that elapses after a change in price. C. the larger the share of the typical person's budget the good absorbs. D. the fewer complements there are for the good. Points Earned: 1/1 Correct Answer: A Your Response: A 8. Which of the following is a determinant of elasticity? A. the number of substitutes B. the percentage of one's budget spent on the good C. the amount of time that has passed since a price change D. all of the above Points Earned: 1/1 Correct Answer: D Your Response: D 9. An elastic demand means that a A. 10 percent reduction in price will raise quantity demanded. B. 10 percent increase in price will lower quantity demanded by less than 10 percent. C. 10 percent increase in price will lower quantity demanded by more than 10 percent. D. 10 percent increase in quantity demanded will raise the price by more than 10 percent. Points Earned: 0/1 Correct Answer: C Your Response: B 10. If the price of apples decreases by 2 percent and causes apple consumption to increase by 4 percent, the...
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This note was uploaded on 06/18/2011 for the course ECON 101 taught by Professor Vicek during the Spring '11 term at Parkland.

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TEST 3 - TEST 3 Submitted by ylee10 on 5/24/2009 6:53:40 PM...

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