Econ200N - First Exam Questions

The smaller the price elasticity of demand the a

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43. The smaller the price elasticity of demand, the A) steeper the demand curve will be through a given point. B) flatter the demand curve will be through a given point. C) more strongly buyers respond to a change in price between any two prices P1 and P2. D) smaller the decrease in equilibrium price when the supply curve shifts rightward from S1 to S2. 44. Using the midpoint method, the price elasticity of demand for a good is computed to be approximately 0.75. Which of the following events is consistent with a 10 percent decrease in the quantity of the good demanded? 45. Some firms eventually experience problems with their capacity to produce output as their output levels increase. For these firms, 46. If a 30 percent change in price causes a 15 percent change in quantity supplied, then the price elasticity of supply is 47. Which of the following statements is NOT valid when supply is perfectly elastic? A) The elasticity of supply approaches infinity. B) The supply curve is horizontal. C) Very small changes in price lead to large changes in quantity demanded. D) The time period under consideration is more likely a short period rather than a long period. 48. A decrease in supply will cause the largest increase in price when 49. In the market for oil in the short run, demand Ch6:
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50. Price controls
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