HW4 - ECO 108: Introduction to Economics Problem Set 4...

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ECO 108: Introduction to Economics Problem Set 4 (Chapter 4 and 5) Professor: Shanjun Li 1.Price elasticity of demand is a measure of A) consumer response to a change in a good's price. B) the slope of the supply curve. C) a market's ability to restore equilibrium after a change in a good's price. D) the demand for a good or service. E) consumer response to excess demand. 2.If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent, then the price elasticity of demand has a value of A) 0.05. B) 0.5. C) 1. D) 5. E) one-fifth. 3.If the price elasticity of demand for a good is less than one, then the demand for that good, with respect to price, is A) elastic. B) inelastic. C) unitary elastic. D) perfectly elastic. E) perfectly inelastic. 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 B) 5 C) 1 D) 0.2 E) 0.015 5.Generally speaking, demand for a good will be more inelastic A) if few substitutes exist. B) when the good represents a large share of the consumer's budget. C) in the long run. D) when many substitutes exist. E) if the price change is great. 6.Big-ticket items such as refrigerators have a_____ price elasticity of demand compared
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This note was uploaded on 09/17/2011 for the course ECO 108 taught by Professor Wolman during the Spring '08 term at SUNY Stony Brook.

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HW4 - ECO 108: Introduction to Economics Problem Set 4...

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