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Supply, Demand, and Price Elasticity Quiz

Supply, Demand, and Price Elasticity Quiz - Supply Demand...

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Supply, Demand, and Price Elasticity Quiz ECO/212 Version 3 1 University of Phoenix Material Supply, Demand, and Price Elasticity Quiz Student: ____________________________ Date: ____________________________________ Section One: Multiple Choice 1. If a 20% decrease in the price of long distance phone calls leads to a 35% increase in the quantity of calls demanded, you may conclude that the demand for phone calls is a. elastic. b. inelastic. c. unit elastic. d. stretchy elastic. 2. Which of the following pairs are examples of substitutes? Popcorn and Soda Automobiles and bicycles Boats and fishing tackle Wine and cheese 3. If a price in a competitive market is “too high to clear the market,” what does this usually mean? Assume upward-sloping supply curves. .a No producer can cover the costs of production at that price. .b Quantity supplied exceeds quantity demanded at that price. .c Producers are leaving the industry. .d Consumers are willing to buy all the units produced at that price.
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