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16 Cards in this Set

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If, when the price of a product rises frm $1.50 to $2, then quantity demanded of the product decreases from 1000 to 900, the price elasticity of demadn coefficient, using the midpoint formula, is
a. 3.00
b. 2.71
c. 0.37
d. 0.33
If a 1% fall in the price of a product causes the quantity demanded of the product to increase by 2%, demand is
a. inelastic
b. elastic
c. unit elastic
d. perfectly elastic
In which range of the demand schedule is demand price inelastic
a. $11-$9
b. $9-$7
c. $7-$5
d. $5-$3
If a business incresed the price of its product from $7 to $8 when the price elasticity of demand was inelastic, then
a. total revenues decreased
b. total revenues increased
c. total revenues remain unchanged
d. total revenues were perfectly inelastic
you are the sales manager for a pizza company and have been infromed taht the price elasticity of demand for your most popular pizza is greater than 1. To increase total revenues, you should
a. increase the price of the pizza
b. decrease the price of the pizza
c. hold pizza prices constatn
d. decrease demand for your pizza
If price is P3, then total revenue is measured by the area
a. 0P3 CQ3
b. 0P3 BQ2
c. 0P3 BQ3
d. 0P3 CQ2
If price falls from P2 to P1, then in this price range demand is
a. relatively inelastic because the loss in total revenue(areas 3+6+8) is greater than the gain in total revenue(area 10)
b. relatively elastic because the loss in total revenue(areas 3+6+8) is greater than the gain in total revenue(area 10)
c.relatively inelastic because the loss in total revenue(area 10)is less than the gain in total revenue(areas 3+6+8)
d. relatively inelastic because the loss in total revenue (area 4+7+9+10) is greater than the gain in total revenue (areas 3+6+8)
As price falls from P4 to P3, you know that demand is
a. elastic because total revenue decreased from 0P4 AQ1 to 0P3 BQ2
b. inelastic becasue total revenue decreased from 0P3 BQ2 to 0P4 AQ1
c. elastic because total revenue increased from 0P4 AQ1 to 0P3 BQ2
d. inelastic because total revenue decreased from 0P4 AQ1 to 0P3 BQ2
Which product is most likely to be the most price elastic
a. bread
b. clothing
c. restaurant meals
d. local telephone service
Which is characteristic of a product whose demand is elastic
a. the price elasticity coefficient is less than 1
b. total revneue decreases if price decreases
c. buyers are relatively insensitive to price changes
d. the percentage change in quantity is greater than the percentage change in price
The demand for Nike basketball shoes is more price elastic than the demand for basketball shoes as a whole. This is best explained by the fact that
a. Nike basdetball shoes are a luxury good, not a necessity
b. Nike basketball swhoes are the best made and widely advertised
c. there are more complements for Nike baskball shoes than for basketball shoes as a whole
d. there are more substitutes for Nike basketball shoes than for basktball shoes as a whole
From a time perspective, the demand for most products is
a. less elastic in the short run and unit elastic in the long run
b. less elastic in the long run and unit elastic in the short run
c. more elastic in the short run than in the long run
d. more elastic in the long run than in the short run
in the following diagram, what is the price elasticity of supply between points A and C
a. 1.33
b. 1.67
c. 1.85
d. 2.46
if supply is inelastic and demand decreases, the total revenue of sellers will
a. increase
b. decrease
c. decrease only if demand is elastic
d. increase only if demand is inelastic
the chief determinant of the price elasticity of supply of a product is
a. the number of good substitutes the product has
b. the length of time sellers have to adjust to a change in price
c. whether the product is a luxury or a necessity
d. whether the product is a durable or a nondurable good
a study shows that the coefficient of the cross elasticity of Coke and Sprite are
a. normal goods
b. complementary goods
c. substitute goods
d. independent goods