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# econ5 - Submitted by Le Thao(THAOLE2 on 12:06:59 PM Points...

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Submitted by Le, Thao (THAOLE2) on 9/29/2011 12:06:59 PM Points Awarded 9.60 Points Missed 0.40 Percentage 96.0% 1. The price elasticity of demand reflects the responsiveness of: A) firms to changes in demand. B) demand to a change in price of a substitute good. C) demand to a change in price. D) quantity demanded to a change in price. Points Earned: 0.4/0.4 Correct Answer(s): D 2. Suppose that Victoria and her friends are running a fundraiser by selling donuts. They want to know what will happen to their revenue if they increase the price of each donut from \$0.80 to \$1. What concept do they need to apply to find out their expected revenue? A) price elasticity of supply B) price elasticity of demand C) cross elasticity of demand D) income elasticity of demand Points Earned: 0.4/0.4 Correct Answer(s): B

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If the price elasticity of demand is 0.5, this means that a ________ increase in price causes a ________ decrease in quantity demanded. A) 20%; 100% B) 30%; 15% C) 20%; 1% D) 5%; 1% Points Earned: 0.4/0.4 Correct Answer(s): B 4. Suppose that in a month the price of a dozen of eggs increases from \$1.50 to \$2. At the same time, the quantity of dozens of eggs demanded decreases from 200 to 150. The price elasticity of demand for dozens of eggs is: A) perfectly inelastic. B) inelastic. C) unitary elastic. D) elastic. Points Earned: 0.4/0.4 Correct Answer(s): C 5. Suppose that in a month the price of tulips increases from \$1 to \$1.50. At the same time, the quantity of tulips demanded decreases from 200 to 190. The price elasticity of demand for tulips (calculated using the initial value formula. is: A) 0.1. B) 0.5. C) 10. D) 20. Points Earned: 0.4/0.4 Correct Answer(s): A 6. If Juan purchases the same number of gallons of gasoline per week regardless of changes in gasoline price, Juan's demand for gasoline is: A) perfectly elastic. B) elastic.
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econ5 - Submitted by Le Thao(THAOLE2 on 12:06:59 PM Points...

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