Question 1 of 20
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%
Question 2 of 20
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
Question 3 of 20
The midpoint formula for elasticity of demand solves the problem of __________ .
A. whether elasticity of demand is really positive or negative
B. whether to use quantity or price in the numerator
C. which price or quantity to use as the initial value of the variable
D. whether to use quantity demanded or supplied
Question 4 of 20
In considering the relationships between price and quantity demanded, ceteris paribus directs the economist to assume that __________ .
A. price increases affect quantity
B. quantity increases affect prices
C. neither price nor quantity affect demand
D. all other variables remain unchanged
Question 5 of 20
The quantity of pencils sold is 1000 at the unit price $0.5. Suppose the price elasticity of demand for pencils by the initial value method is 2, and you would like to increase the quantity sold to 1200. Then the new price for pencils must be __________ .
A. $0.05
B. $0.25
C. $0.30
D. $0.45
Question 6 of 20
A demand curve is defined as the relationship between __________ .
A. the price of a good and the quantity of that good that consumers are willing to buy
B. the price of a good and the quantity of that good that producers are willing to sell
C. the income of consumers and the quantity of a good that consumers are willing to buy
D. the income of consumers and the quantity of a good that producers are willing to sell
Question 7 of 20
The quantity of TVs sold is 100 at the unit price $200. Suppose the price elasticity of demand for TVs by the initial value method is 2.0, and you would like to decrease the unit price for TVs to $150. Then the new quantity sold must be __________ .
A. 125
B. 150
C. 200
D. 250
Question 8 of 20
The quantity demanded of a product increases as __________ .
A. consumer income rises
B. the prices of other products fall
C. the price of the product rises
D. the price of the product falls
Question 9 of 20
When supply decreases and the supply curve shifts to the left, equilibrium price __________ and equilibrium quantity __________ .
A. increases; increases
B. increases; decreases
C. decreases; increases
D. decreases; decreases
Question 10 of 20
Suppose that in a month the price of oranges increases from $.75 to $1. At the same time, the quantity of oranges demanded decreases from 100 to 80. The price elasticity of demand for oranges (calculated using the initial value formula) is __________ .
A. 0.75
B. 0.6
C. 0.25
D. 20
Question 11 of 20
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
Question 12 of 20
When demand decreases and the demand curve shifts to the left, equilibrium price __________ and equilibrium quantity __________ .
A. increases; increases
B. increases; decreases
C. decreases; increases
D. decreases; decreases
Question 13 of 20
If a competitive market operates perfectly, it relies on __________ .
A. the number of people buying goods
B. the laws of supply and demand
C. how many products can be produced for sale
D. how much people are willing to pay for the products
Question 14 of 20
At Tony's Restaurant, the quantity of large pizzas sold is 200 at the unit price $15. Suppose the price elasticity of demand for pizzas by the initial value method is 1.5, and you would like to increase the quantity sold to 250. Then the new price must be __________ .
A. $13
B. $12.50
C. $11.50
D. $11.25
Question 15 of 20
A good synonym for elasticity would be __________ .
A. change
B. demand
C. responsiveness
D. stickiness
Question 16 of 20
When demand increases and the demand curve shifts to the right, equilibrium price __________ and equilibrium quantity __________ .
A. increases; increases
B. increases; decreases
C. decreases; increases
D. decreases; decreases
Question 17 of 20
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
Question 18 of 20
A change in the quantity demanded of a product is the result of a change in __________ .
A. the price of the product
B. the price of related goods
C. consumer income
D. the cost of producing the product
Question 19 of 20
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
Question 20 of 20
When supply increases and the supply curve shifts to the right, equilibrium price __________ and equilibrium quantity __________ .
A. increases; increases
B. increases; decreases
C. decreases; increases
D. decreases; decreases
