Chapter 5 Multiple Choice Flashcards
Which of the following is not a determinant of the price elasticity of demand for a good? a.the time horizon b.the steepness or flatness of the supply curve for the good c.the definition of the market for the good d.the availability of substitutes for the good
ANS: B
The greater the price elasticity of demand, the a.more likely the product is a necessity. b. smaller the responsiveness of quantity demanded to a change in price. c. greater the percentage change in price over the percentage change in quantity demanded. d. greater the responsiveness of quantity demanded to a change in price.
ANS: D
Suppose that Juan Carlos is filling out a survey that he received in the mail. The survey asks him what he would do if the price of his favorite toothpaste increased. Juan Carlos reports that he would switch to a different brand. The survey asks what he would do if the price of all toothpastes increased. Juan Carlos reports that he must use toothpaste, so he would have to adjust his spending elsewhere. These examples illustrate the importance of a.changes in total revenue in determining the price elasticity of demand. b.a necessity versus a luxury in determining the price elasticity of demand. c.the definition of a market in determining the price elasticity of demand. d.the time horizon in determining the price elasticity of demand.
ANS: C
Refer to Figure 5-5. Using the midpoint method, between prices of $12 and $18, price elasticity of demand is
a. 0.33.
b. 0.67.
c. 1.33.
d. 1.89.
ANS: A
Refer to Figure 5-13. Over which range is the supply curve in this figure the most elastic?
a. $16 to $40
b. $40 to $100
c. $100 to $220
d. $220 to $430
ANS: A
Which of the following is an illustration of the market for original paintings by deceased artist Vincent Van Gogh?
ANS: C
Refer to Figure 5-17. Which of the following statements is not correct?
a. Supply curve A is perfectly inelastic.
b. Supply curve B is perfectly elastic.
c. Supply curve C is unit elastic.
d. Supply curve D is more elastic than supply curve C.
ANS: C
Refer to Table 5-6. Which scenario describes the market for oil in the short run in comparison to the long run?
a. Scenario A describes both the short run and the long run.
b. Scenario D describes both the short run and the long run.
c. Scenario D describes the short run, whereas scenario A describes the long run.
d. Scenario C describes the short run, whereas scenario B describes the long run.
ANS: C
