If the University Chamber Music Society decides to raise ticket prices to provide more funds to finance concerts, the Society is assuming that the demand for tickets is:-inelastic.-parallel to the horizontal axis.-shifting to the left.-elastic.
  • -inelastic
  • relatively inelastic.
  • -increase the quantity demanded by about 25 percent
  • of unit elasticity throughout.
If the price elasticity of demand for a product is 2.5, then a price cut from $2.00 to $1.80 will:-increase the quantity demanded by about 2.5 percent.-increase the quantity demanded by about 25 percent.-decrease the quantity demanded by about 2.5 percent.-increase the quantity demanded by about 250 percent.
  • -increase the amount demanded by more than 10 percent.
  • -the greater will be the price od elasticity of demand
  • -increase the quantity demanded by about 25 percent
  • -decrease the quantity of X demanded by less that 4 percent
A manufacturer of frozen pizzas found that total revenue decreased when price was lowered from $5 to $It was also found that total revenue decreased when price was raised from $5 to $Thus,-$5 is not the equilibrium price of pizza.-the demand for pizza is inelastic above $5 and elastic below $5.-the demand for pizza is elastic above $5 and inelastic below $5.-the demand for pizza is elastic both above and below $5.
  • - the demand for pizza is elastic about $5 and inelastic below $5
  • -the greater will be the price od elasticity of demand
  • -the sensitivity of consumer purchases to price changes.
  • -negative and therefore the goods are complements
Answer the question on the basis of the following demand schedule:Refer to the data. Which of the following is correct?-Although the demand curve is convex to the origin, price elasticity of demand is constant throughout.-Although the slope of the demand curve is constant, price elasticity declines as we move from high to low price ranges.-A steep slope means demand is inelastic; a flat slope means demand is elastic.-Although the slope of the demand curve is constant, price elasticity increases as we move from high to low price ranges.
  • an increase in the minimum wage would increase the total incomes of teenage workers as a group.
  • -decrease the quantity of X demanded by less that 4 percent
  • slope of the curve varies, but its elasticity is constant.
  • - Although the slope of the demand curve is constant, price elasticity increases as we move from high to low price ranges.
In which of the following cases will total revenue increase?-Price rises and demand is inelastic.-Price rises and demand is elastic. -Price falls and supply is elastic.-Price falls and demand is inelastic.
  • -is elastic
  • The elasticity coefficient is less than one.
  • -price rises and demand is inelastic
  • -increase total revenue by D-A
Suppose that the price of peanuts falls from $3 to $2 per bushel and that, as a result, the total revenue received by peanut farmers changes from $16 to $14 billion. Thus:-the demand curve for peanuts has shifted to the right.-no inference can be made as to the elasticity of demand for peanuts.-the demand for peanuts is elastic. -the demand for peanuts is inelastic.
  • - the demand for pizza is elastic about $5 and inelastic below $5
  • -the demand for peanuts is inelastic
  • -a 10 percent increase in income will increase the purchase of lys by 20 percent.
  • -negative and therefore the goods are complements
If a firm's demand for labor is elastic, a union-negotiated wage increase will:-cause a shortage of labor.-cause the firm's total payroll to decline.-necessarily be inflationary.-cause the firm's total payroll to increase.
  • -cause a firms total payroll to decline.
  • -price rises and demand is inelastic
  • -quantity demanded of X/ percentage change in price of Y
  • -an increase in price will increase total revenue.
If the demand for product X is inelastic, a 4 percent increase in the price of X will:-decrease the quantity of X demanded by more than 4 percent.-decrease the quantity of X demanded by less than 4 percent.-increase the quantity of X demanded by less than 4 percent.-increase the quantity of X demanded by more than 4 percent
  • -decrease the quantity of X demanded by less that 4 percent
  • -increase the quantity demanded by about 25 percent
  • consumers are largely unresponsive to a per unit price change.
  • -negative and therefore the goods are complements
The concept of price elasticity of demand measures:-the extent to which the demand curve shifts as the result of a price decline.-the sensitivity of consumer purchases to price changes.-the number of buyers in a market. -the slope of the demand curve.
  • -an increase in price will increase total revenue.
  • the supply of old baseball cards is price inelastic.
  • -the sensitivity of consumer purchases to price changes.
  • -is elastic
(Last Word) Which of the following is not an example of pricing based on group differences in elasticity of demand?-Cash rebates for purchases of automobiles.-Senior-citizen discounts at restaurants and motels.-Child discounts for admission to theme parks.-Discounted student prices for visits to museums
  • -decrease the quantity of X demanded by less that 4 percent
  • -cause a firms total payroll to decline.
  • -cash rebated for purchases of automobiles
  • -negative and therefore the goods are complements
Suppose that a 20 percent increase in the price of normal good Y causes a 10 percent decline in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is:-negative and therefore these goods are complements.-positive and therefore these goods are complements.-positive and therefore these goods are substitutes.-negative and therefore these goods are substitutes
  • -negative and therefore the goods are complements
  • positive but less than one; therefore X is an inferior good.
  • -a 10 percent increase in income will increase the purchase of lys by 20 percent.
  • 2 percent and total expenditures on bread will rise.
Refer to the information. Over the $7-$5 price range, demand is:-perfectly elastic.-perfectly inelastic.-elastic.-inelastic.
  • relatively inelastic.
  • decrease if demand were D2 only.
  • - A+B
  • -inelastic
Refer to the information. Over the $11-$9 price range, demand is:perfectly inelastic.inelastic.perfectly elastic.elastic.
  • -elastic
  • elastic.
  • -inelastic
  • set ticket prices at $5.
When the percentage change in price is greater than the resulting percentage change in quantity demanded:-an increase in price will increase total revenue.-demand may be either elastic or inelastic. -a decrease in price will increase total revenue.-demand is elastic.
  • -cash rebated for purchases of automobiles
  • -an increase in price will increase total revenue.
  • -quantity demanded of X/ percentage change in price of Y
  • -increase the amount demanded by more than 10 percent.
Assume that a 3 percent increase in income across the economy produces a 1 percent decline in the quantity demanded of good X. The coefficient of income elasticity of demand for good X is:-negative and therefore X is an inferior good.-positive and therefore X is a normal good.-positive and therefore X is an inferior good.-negative and therefore X is a normal good.
  • negative, indicating complementary goods.
  • -the demand for peanuts is inelastic
  • -negative and therefor X is an inferior good.
  • -cash rebated for purchases of automobiles
Refer to the diagrams. The case of a normal good is represented by figure:D.C.A.B.
  • D.
  • -A
  • -elastic
  • A
Refer to the data. The price elasticity of demand is relatively elastic:-in the $3-$1 price range.-in the $6-$4 price range.-over the entire $6-$1 price range.-in the $6-$5 price range only
  • - in the $6-$4 price range
  • -increase total revenue by D-A
  • -D1 is more elastic that D2
  • in the $3-$1 price range.
Which of the following is correct?-The price elasticity coefficient applies to demand, but not to supply.-If the demand for a product is inelastic, a change in price may cause total revenue to change in either the opposite or the same direction.-If the demand for a product is inelastic, a change in price will cause total revenue to change in the opposite direction.-If the demand for a product is inelastic, a change in price will cause total revenue to change in the same direction.
  • there are fewer good substitutes for soft drinks as a whole than for Pepsi specifically.
  • - if the demand for a product is inelastic, a change in price will cause total revenue to change in the same direction.
  • - in the $6-$4 price range
  • an increase in the minimum wage would increase the total incomes of teenage workers as a group.
Refer to the diagram. If price falls from P1 to P2, total revenue will become area(s):-A + C.-C + D.-B + D.-C.
  • -B+D
  • -elastic
  • -A
  • B.
The demand schedules for such products as eggs, bread, and electricity tend to be: -relatively price inelastic.-relatively price elastic.-of unit price elasticity.-perfectly price elastic
  • -relatively price inelastic
  • -price rises and demand is inelastic
  • relatively inelastic.
  • -increase the amount demanded by more than 10 percent.
Refer to the diagram. Total revenue at price P1 is indicated by area(s):-A.-A + B.-C + D.-A + C.
  • -B+D
  • elastic.
  • -A
  • - A+B
Suppose that as the price of Y falls from $2.00 to $1.90, the quantity of Y demanded increases from 110 toThen the absolute value of the price elasticity (midpoint method) is:-2.09.-4.00.-3.-1.37.
  • -elastic
  • -$1.37
  • -B+D
  • 1.2.
The price of product X is reduced from $100 to $90 and, as a result, the quantity demanded increases from 50 to 60 units. Therefore, demand for X in this price range:is inelastic.is elastic.has declined.is of unit elasticity.
  • -price rises and demand is inelastic
  • -is elastic
  • -D1 is more elastic that D2
  • of unit elasticity throughout.
The more time consumers have to adjust to a change in price:-the more likely the product is an inferior good.-the greater will be the price elasticity of demand.-the smaller will be the price elasticity of demand.-the more likely the product is a normal good.
  • -the greater will be the price od elasticity of demand
  • -the demand for peanuts is inelastic
  • -decrease the quantity of X demanded by less that 4 percent
  • -cash rebated for purchases of automobiles
Refer to the diagram. The decline in price from P1 to P2 will:decrease total revenue by A.increase total revenue by D.increase total revenue by B + D.increase total revenue by D - A.
  • of unit elasticity throughout.
  • in the $4-$3 price range only.
  • its slope is constant throughout.
  • -increase total revenue by D-A
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