67. Refer to the above information to answer this question. If the price of both water and diamonds is
$120 per unit, and Lisa has $720 to spend, how many units of each would she purchase?
A. 6 water.
B. 4 water and 2 diamonds.
C. 3 water and 3 diamonds.
Topic: 04-07 Who Pays Sales Taxes?
Type: Pickup
73.
Refer to the information above to answer this question. What will be the equilibrium price and
quantity if a $2 per unit excise tax is imposed on this product?
A. $11 and 40.
B. $11 and 80.
C. $10 and 50
45. According to consumer research, what happens to the proportion of disposable income which is
spent by Canadians on the various product groups as the level of income increases?
A. The fraction spent on both food and travel increases whereas the amount
197.
What is the main determinant of the price elasticity of supply?
Time is the main determinant of supply elasticity. The longer the time involved, the greater the
supply elasticity. In the long run, firms have time to make the necessary adjustments to
65.
Refer to the graph above to answer this question. Which of the following statements is correct?
A. The demand curves in graphs I, II and III are, respectively, perfectly elastic, inelastic and
perfectly inelastic.
B. The demand curves in graphs I, II
36.
If the price of Moonlight massage oil decreases from $3 to $2.50 and, as a result, total revenue
increases from $6,000 to $7,500, what is the elasticity of demand?
A. 0.22.
B. 0.55.
C. 1.22.
D. 1.67.
E. 2.2.
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Blooms:
190.
Suppose the demand curve is perfectly inelastic and the equilibrium price is $8 and equilibrium
quantity is 9. If the government impose an excise tax of $1 per unit, what will be the new price
and quantity traded? What is the total tax revenue and wh
77. Refer to the above information to answer this question. For a price change from $5 to $4.50, which
consumer group has the lowest price elasticity of demand?
A. Type A.
B. Type B.
C. Type O.
D. Cannot be determined.
78. Refer to the above information t
141.
How is a firm's total revenue calculated?
A. Price times average revenue.
B. Price times quantity sold.
C. Average revenue times quantity produced.
D. Quantity demanded times quantity supplied.
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Blooms: Comprehension
25.
Refer to the above graph to answer this question. If the price of rice crackers are $2, beer is $3,
and Carla has a budget of $14, how much of each will she purchase if she wishes to maximize
her total utility?
A. 1 cracker and 4 beers.
B. 2 crackers
55. Refer to the above table to answer this question. Suppose that soya milk is free, how much will
Mia consume?
A. 0.
B. 4 litres.
C. 5 litres.
D. 7 litres.
E. Cannot be determined.
Suppose that Irina is prepared to pay a maximum of $2.40 for her first g
182.
Suppose the demand curve is perfectly inelastic and the government imposes a tax of $2 per
unit. What portion of the tax will be paid by the producer?
The more inelastic the demand curve of a product, the larger is the percentage of a sales or
excise
102.
What is the effect of a rise in income on the quantity demanded of a product?
A. It will rise if it is an inferior good.
B. It will rise if it is a normal good.
C. It will fall if it has many substitute goods.
D. It will fall if price elasticity of d
132.
What is the effect of a rise in income on the demand for a product?
A. It will rise if the product is an inferior product.
B. It will rise if the product is a normal product.
C. It will fall if the product is a normal product.
D. It will fall in both
Sayre - Chapter 04
28.
Refer to the information above to answer this question. What is the elasticity of demand in the
$14 to $16 range?
A. 0.02.
B. 0.7.
C. 1.4.
D. 2.1.
Blooms: Analysis, Application
Difficulty: Difficult
Learning Objective: 04-02 Describ
13.
What will happen to the quantity demanded if the price elasticity of demand is 2 and price
increases by 10%?
A. It increases by 10%.
B. It decreases by 5%.
C. It decreases by 20%.
D. It increases by 20%.
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Blooms: Anal
88. Refer to Table 5.13 to answer this question. What is the marginal utility of the 5th unit?
A. 10.
B. 20.
C. 100.
D. Cannot be answered from this information.
89. Refer to Table 5.13 to answer this question. With the consumption of what quantity is mar
25. Refer to the above graph to answer this question. If the price of rice crackers are $2, beer is $3,
and Carla has a budget of $14, how much of each will she purchase if she wishes to maximize her
total utility?
A. 1 cracker and 4 beers.
B. 2 crackers
44.
Which of the following products has the most inelastic demand?
A. Restaurant meals.
B. Tomatoes.
C. Movie theatre admissions.
D. Eggs.
E. Ocean cruises.
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Blooms: Comprehension, Knowledge
Difficulty: Easy
Learning Obje
110.
Suppose that the price of Product A increased from $9 to $11 and the quantity demanded of
Product B increased from 192 to 208. What is the value of the cross elasticity?
A. + 0.2.
B. + 0.4.
C. + 1.0.
D. + 2.5.
E. + 5.0.
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3.
What is the amount of additional utility derived from the consumption of an extra unit of a
product called?
A. Marginal utility.
B. Optimal utility.
C. Marginal demand.
D. Optimal demand.
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Blooms: Comprehension, Knowle
Difficulty: Difficult
Learning Objective: 04-04 Use real-world examples to demonstrate that the concept of elasticity is a powerful tool.
Sayre - Chapter 04 #172
Topic: 04-07 Who Pays Sales Taxes?
Type: Pickup
173.
Given the demand curve in the following
Difficulty: Difficult
Learning Objective: 04-01 Explain and calculate price elasticity of demand.
Sayre - Chapter 04 #123
Topic: 04-01 Price Elasticity of Demand
Type: Pickup
124.
Refer to the information above to answer this question. What is the price e
80.
Refer to the graph above to answer this question. If supply was increased by 30 million
bushels, what would be the new equilibrium price and quantity?
A. $3 and 20 million bushels.
B. $3 and 50 million bushels.
C. $3 and 70 million bushels.
D. $7 and
94.
Refer to the graph above to answer this question. What is the supply elasticity of S2 in the $2.50
to $4.00 range?
A. 1.15.
B. 2.17.
C. It is higher than the supply elasticity of S1 in the same price range.
D. It is lower than the supply elasticity of
52.
Refer to the information above to answer this question. What is a demand when the elasticity
coefficient is greater than 1?
A. 1.
B. 2.
C. 3.
D. 4.
E. 5.
Blooms: Comprehension, Knowledge
Difficulty: Easy
Learning Objective: 04-01 Explain and calculate
117.
Refer to the graphs above to answer this question. Suppose that the price of orange juice
increases from P1 to P2 and the demand curve for apple juice shifts to the right from D1 to D2.
What is the relationship between orange juice and apple juice?
A
15. Refer to the above information to answer this question. After the consumption of how many units
will total utility be maximized?
A. 4.
B. 5.
C. 7.
D. 8.
E. Cannot be determined.
16. Refer to the above information to answer this question. How many unit
149.
Which of the following circumstances will raise the total revenue of oat farmers?
A. A good harvest, combined with inelastic demand.
B. A poor harvest, combined with inelastic demand.
C. A poor harvest, combined with elastic demand.
D. A good wheat a
161.
Define elasticity coefficient
A number that measures the responsiveness of quantity demanded to a change in price
Blooms: Comprehension, Knowledge
Difficulty: Easy
Learning Objective: 04-01 Explain and calculate price elasticity of demand.
Sayre - Ch