TEST 3 - TEST3 :53:40PM PointsAwarded PointsMissed...

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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:
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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 
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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
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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.
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