Chapter 5: Price Elasticity of Demand and Supply (Practice Quiz)

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Chapter 5: Price Elasticity of Demand and Supply (Practice Quiz)
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2014-03-19 05:17:26
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microeconomics 2302 price elasticity demand supply
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Chapter 5: Price Elasticity of Demand and Supply (Practice Quiz)
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    • author "Patrick Rosenauer"
    • tags ""
    • folders ""
    • description ""
    • fileName "Chapter 5: Price Elasticity of Demand and Supply (Practice Quiz)"
    • If an increase in bus fares in Charlotte, North Carolina reduces the total revenue of the public transit system, this is evidence that demand is
    • A. Price elastic.
    • B. Price inelastic.
    • C. Unitary elastic.
    • D. Perfectly elastic.
    • A. Price elastic.
  1. Which of the following will result in an increase in total revenue?
    A. Price increases when demand is elastic.
    B. Price increases when demand is unitary elastic.
    C. Price decreases when demand is inelastic.
    D. Price decreases when demand is elastic.
    D. Price decreases when demand is elastic.
    (this multiple choice question has been scrambled)
  2. You are on a committe that is considering ways to raise money for your city's symphony program. You would recommend increasing the price of symphony tickets only if you thought the demand curve for these tickets was
    A. Inelastic.
    B. Elastic.
    C. Unitary elastic.
    D. Perfectly elastic.
    A. Inelastic.
    (this multiple choice question has been scrambled)
  3. The price elasticity of demand for a horizontal demand curve is
    A. Inelastic.
    B. Unitary elastic.
    C. Perfectly elastic.
    D. Elastic.
    E. Perfectly inelastic.
    C. Perfectly elastic.
    (this multiple choice question has been scrambled)
  4. Suppose the quantity of steak purchased by the jones family is 110 pounds per year when the price is $2.10 per pound and 90 pounds per year when the price is $3.90 per pound. The price elasticity of demand coefficient for this family is
    A. 2.00.
    B. 0.33.
    C. 0.50.
    D. 1.00.
    B. 0.33.
    (this multiple choice question has been scrambled)
  5. If a 5 percent reduction in the price of a good produces a 3 percent increase in the quantity demanded, the price elasticity of demand over this range of the demand curve is
    A. Perfectly inelastic.
    B. Perfectly elastic.
    C. Inelastic.
    D. Unitary elastic.
    E. Elastic.
    C. Inelastic.
    (this multiple choice question has been scrambled)
  6. A manufacturer of Beanie Babies hires an economist to study th price elasticity of demand for this product. This economist estimates that the price elasticity of demand coefficient for a range of prices close to the selling price is greater than 1.
    The relationship between changes in price and quantity demanded for this segment of the demand curve is
    A. Perfectly elastic.
    B. Perfectly inelastic.
    C. Unitary elastic.
    D. Elastic.
    E. Inelastic.
    D. Elastic.
    (this multiple choice question has been scrambled)
  7. A downward-sloping straight-line demand curve will have a
    A. Positive slope.
    B. Constant price elasticity of demand coefficient throughout the length of the demand curve.
    C. Higher price elasticity of demand coefficient along the top of the demand curve.
    D. Lower price elasticity coefficient along the top of the demand curve.
    C. Higher price elasticity of demand coefficient along the top of the demand curve.
    (this multiple choice question has been scrambled)
  8. The price elasticity of demand coefficient for a good will be lower
    A. If there are few or no substitutes available.
    B. If a small portion of the budget will be spent on the good.
    C. In the short run than in the long run.
    D. If all of the above are true.
    D. If all of the above are true.
  9. The income elasticity of demand for shoes is estimated to be 1.50. We can condlude that shoes
    A. Are a normal good.
    B. Have a relatively steep demand curve.
    C. Have a relatively flat demand curve.
    D. Are an inferior good.
    A. Are a normal good.
    (this multiple choice question has been scrambled)
  10. To determine whether two goods are substitutes or complements, an economist would estimate the
    A. Price elasticity of demand.
    B. Income elasticity of demand.
    C. Price elasticity of supply.
    D. Cross-elasticity of demand.
    D. Cross-elasticity of demand.
    (this multiple choice question has been scrambled)
  11. If the government wanted to raise tax revenue and shift most of the tax burden to the sellers, it would impose a tax on a good with a
    A. Flat (perfectly elastic) demand curve and flat (elastic) supply curve.
    B. Flat (perfectly elastic) demand curve and a steep (inelatic) supply curve.
    C. Steep (inelastic) demand curve and a steep (inelastic) supply curve.
    D. Steep (inelastic) demand curve and a flat (elastic) supply curve.
    B. Flat (perfectly elastic) demand curve and a steep (inelatic) supply curve.
    (this multiple choice question has been scrambled)
  12. As shown in Exhibit 11, assume the government places a $1 per pack sales tax on cigarettes. The percentage of the burden of taxation paid by consumers of a pack of cigarettes is
    A. 100 percent.
    B. 50 percent.
    C. 25 percent.
    D. Zero.
    (Diagram on page 152)
    B. 50 percent.
    (this multiple choice question has been scrambled)
  13. As shown in Exhibit 11, assume the government places a $1 per pack sales tax on taxation paid by tobacco seller is:
    A. Zero.
    B. 75 percent.
    C. 100 percent.
    D. 50 percent.
    D. 50 percent.
    (this multiple choice question has been scrambled)
  14. As shown in Exhibit 11, the $1 per pack sales tax on cigaretts raises tax revenue per day totaling:
    A. $10 million.
    B. $6 million.
    C. $5 million.
    D. $15 million.
    B. $6 million.
    (this multiple choice question has been scrambled)

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