Question 1

Suppose when the price of pizza goes from $8 to $12 per pie,production increases from 2,500 pies to 4,000 pies per month.Using the mid-point method,the percentage change in price is:

Accepted Answer

A)   40 percent
B)   46 percent
C)   1.31
D)   0.35E) C) and D)
F) None of the above

Question 2

In general,the more elastic a demand curve is the:

Accepted Answer

A)   flatter it will be.
B)   steeper it will be.
C)   more bowed-in it will be.
D)   faster it will shift when price changes.E) A) and B)
F) A) and C)

Question 3

Coke and Pepsi probably have a:

Accepted Answer

A)   less elastic cross-price elasticity of demand than do Coke and bananas.
B)   cross-price elasticity of demand that is smaller than do Coke and bananas.
C)   negative cross-price elasticity of demand.
D)   more elastic cross-price elasticity of demand than do Coke and bananas.E) A) and D)
F) B) and C)

Question 4

When the quantity effect outweighs the price effect:

Accepted Answer

A)   a price increase will cause a decrease in total revenue.
B)   a price increase will cause an increase in total revenue.
C)   a price decrease will cause a decrease in total revenue.
D)   None of these is true.E) A) and B)
F) A) and D)

Question 5

If a good has an income elasticity of 0.18,then it is:

Accepted Answer

A)   a normal good, and a necessity.
B)   a normal good, and a luxury good.
C)   an inferior good, and a necessity.
D)   an inferior good, and a luxury.E) B) and D)
F) All of the above

Question 6

If the price of a cup of Dunkin' Donuts coffee increases while the price of a Starbucks latte is unchanged,we expect the number of lattes purchased at Starbucks to:

Accepted Answer

A)   increase as some people switch from Dunkin' Donuts coffee to Starbucks lattes.
B)   decrease as some people switch from Dunkin' Donuts coffee to the Starbucks lattes.
C)   decrease as some people have less money to spend on caffeinated beverages.
D)   decrease as some people switch from Starbucks lattes to Dunkin' Donuts coffee.E) None of the above
F) A) and C)

Exam 4: Elasticity

When the quantity effect outweighs the price effect:

Correct Answer
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Coke and Pepsi probably have a:

Correct Answer
verified

Suppose when the price of pizza goes from $8 to $12 per pie,production increases from 2,500 pies to 4,000 pies per month.Using the mid-point method,the percentage change in price is:

Correct Answer
verified

If the price of a cup of Dunkin' Donuts coffee increases while the price of a Starbucks latte is unchanged,we expect the number of lattes purchased at Starbucks to:

Correct Answer
verified

In general,the more elastic a demand curve is the:

Correct Answer
verified

If a good has an income elasticity of 0.18,then it is:

Correct Answer
verified

Exam 4: Elasticity

When the quantity effect outweighs the price effect:

Correct AnswerverifiedShow Answer

Coke and Pepsi probably have a:

Correct AnswerverifiedShow Answer

Suppose when the price of pizza goes from $8 to $12 per pie,production increases from 2,500 pies to 4,000 pies per month.Using the mid-point method,the percentage change in price is:

Correct AnswerverifiedShow Answer

If the price of a cup of Dunkin' Donuts coffee increases while the price of a Starbucks latte is unchanged,we expect the number of lattes purchased at Starbucks to:

Correct AnswerverifiedShow Answer

In general,the more elastic a demand curve is the:

Correct AnswerverifiedShow Answer

If a good has an income elasticity of 0.18,then it is:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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