Practice_test_2_Spring_2011

Practice_test_2_Spring_2011 - Name:...

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Unformatted text preview: Name: ________________________ Class: ___________________ Date: __________ ID: A 1 Practice test 2 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. If the price elasticity of demand for a good is 0.8, then which of the following events is consistent with a 4 percent decrease in the quantity of the good demanded? a. a 0.2 percent increase in the price of the good b. a 3.2 percent increase in the price of the good c. a 4.8 percent increase in the price of the good d. a 5 percent increase in the price of the good Figure 5-5 ____ 2. Refer to Figure 5-5. Using the midpoint method, between prices of $30 and $36, price elasticity of demand is about a. 0.5. b. 0.82. c. 1.22. d. 2. ____ 3. When demand is perfectly inelastic, the demand curve will be a. negatively sloped, because buyers decrease their purchases when the price rises. b. vertical, because buyers purchase the same amount as before whenever the price rises or falls. c. positively sloped, because buyers increase their purchases when price rises. d. positively sloped, because buyers increase their total expenditures when price rises. Name: ________________________ ID: A 2 ____ 4. If demand is price inelastic, then when price rises, a. total revenue will fall. b. total revenue will rise. c. total revenue will remain unchanged. d. total revenue may rise, fall, or remain unchanged. More information is need to determine the change in total revenue with certainty. ____ 5. Moving downward and to the right along a linear demand curve, we know that total revenue a. first increases, then decreases. b. first decreases, then increases. c. always increases. d. always decreases. ____ 6. Muriel's income elasticity of demand for football tickets is 1.50. All else equal, this means that if her income increases by 20 percent, she will buy a. 150 percent more football tickets. b. 50 percent more football tickets. c. 30 percent more football tickets. d. 20 percent more football tickets. ____ 7. The price elasticity of supply measures how responsive a. sellers are to a change in price. b. sellers are to a change in buyers' income. c. buyers are to a change in production costs. d. equilibrium price is to a change in supply. Figure 5-14 ____ 8. Refer to Figure 5-14. Using the midpoint method, what is the price elasticity of supply between $6 and $8? a. 0.86 b. 1.00 c. 1.17 d. 1.25 Name: ________________________ ID: A 3 Figure 6-4 ____ 9. Refer to Figure 6-4 . For a price ceiling to be binding in this market, it would have to be set at a. any price below $6. b. a price between $3 and $6. c. a price between $6 and $9. d. any price above $6. ____ 10. When a tax is imposed on the buyers of a good, the demand curve shifts a. upward by the amount of the tax....
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This note was uploaded on 01/30/2012 for the course ECON 2106 taught by Professor Minjaesong during the Spring '06 term at Georgia Tech.

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Practice_test_2_Spring_2011 - Name:...

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