ECONOMICS CHAPTER 6

question

The price ______________________ of demand measures the responsiveness, or sensitivity, of consumers to a price change.

answer

Elasticity

question

Why will the coefficient for the price elasticity of demand always be a negative number?
Because price and quantity demanded are not related
Because the demand curve is upward sloping
Because price and quantity demanded are inversely related
Because price and quantity demanded are positively related

answer

Because price and quantity demanded are inversely related.

question

What type of demand is represented by a given change in price that leads to a larger change in the quantity demanded?
Multiple choice question.
Cross inelastic
Unit elastic
Inelastic
Elastic

answer

Elastic

question

If a 4% decrease in the price of coffee leads to a 2% increase in the quantity demanded, the price elasticity of demand for coffee is relatively price

answer

Inelastic

question

When demand is relatively price ____________________ , the coefficient for the price elasticity of demand will be less than one.

answer

Inelastic

question

How is a buyer's responsiveness to price changes measured?

By the behavior of firms' production
By the price elasticity of demand coefficient
By the level to which demand shifts as incomes changes
By the price elasticity of supply coefficient

answer

By the price elasticity of demand coefficient

question

A small percentage change in quantity demanded divided by a larger percentage change in price indicates _________________ demand.

answer

Inelastic

question

Economists typically express the elasticity coefficient as an absolute value in order to ______.

emphasize demand
avoid ambiguity
use whole numbers
simplify calculations

answer

avoid ambiguity

question

When demand is unit elastic, the percentage change in quantity demanded is ______ the percentage change in price.

less than
equal to
greater than
not correlated with

answer

equal to

question

A coefficient of price elasticity of demand that is greater than 1 indicates that demand is____________

answer

elastic

question

An addict's demand for heroin is an example of a demand that is perfectly

answer

Inelastic

question

A 5% decline in the price of cut flowers results in a 3% increase in the quantity demanded. Therefore, the demand for cut flowers is ______.

answer

Inelastic

question

When the price elasticity of demand is perfectly______________ , a change in price causes no change in the quantity demanded.

answer

Inelastic

question

If the percentage change in quantity demanded is less than the percentage change in price, then the price elasticity of demand is ______.

cross inelastic
unit elastic
inelastic
elastic

answer

inelastic

question

What type of price elasticity of demand results from a relatively small percentage change in quantity demanded divided by a relatively larger percentage change in price?

Cross elastic
Elastic
Inelastic
Unit elastic

answer

Inelastic

question

A product that exhibits perfectly elastic demand has a price elasticity coefficient equal to ______.

one
zero
two
infinity

answer

infinity

question

Which of the following is true when the demand is unit elastic?

The percentage change in quantity demanded is not correlated with the percentage change in price.
The percentage change in quantity demanded is greater than the percentage change in price.
The percentage change in quantity demanded is less than the percentage change in price.
The percentage change in quantity demanded is equal to the percentage change in price.

answer

The percentage change in quantity demanded is equal to the percentage change in price.

question

Total revenue is calculated by (multiplying/dividing) the product price by the quantity sold.

answer

multiplying

question

Which of the following would most exemplify perfectly inelastic demand?

Smokers' need for cigarettes
A diabetic's demand for insulin
A mining firm selling its output in a purely competitive market
Drivers' demand for gasoline

answer

A diabetic's demand for insulin

question

When a change in price does not cause a change in the quantity demanded, the price elasticity of demand is considered ______.

perfectly elastic
perfectly inelastic
unit elastic
cross inelastic

answer

perfectly inelastic

question

If product demand is relatively elastic, what will be the effect on the total revenue if the price is increased?

It cannot be determined.
It stays the same.
It decreases.
It increases.

answer

it decreases

question

When the price elasticity coefficient is equal to infinity, the product exhibits ______ demand.

perfectly elastic
relatively inelastic
perfectly inelastic
unit elastic

answer

perfectly elastic

question

How is total revenue calculated?

Price - Quantity
Price ÷ Quantity
Price + Quantity
Price × Quantity

answer

Price × Quantity

question

When the demand for a product is_______________ and the price is reduced, total revenue will fall.

answer

Inelastic

question

If the price elasticity of demand is unit elastic, the change in price is ______ the change in quantity.

more dominant than
less than
exactly offset by
greater than

answer

exactly offset by

question

When the price elasticity of demand for a product is relatively price elastic and price is ______, total revenue will ______.

increased; decrease
increased; increase
increased; stay constant
decreased; decrease

answer

increased; decrease

question

Which of the following typically varies over the different price ranges of the same demand curve?

Prices of related goods
Nature of the good
Elasticity
Tastes of consumers

answer

Elasticity

question

For all down-sloping demand curves, the price elasticity of demand is more elastic ______.

at the midpoint of the demand curve
toward the upper left
toward the lower left
toward the lower right

answer

toward the upper left

question

If demand is ______, a price decrease will reduce total revenue.

unit elastic
perfectly elastic
elastic
inelastic

answer

Inelastic

question

When price and total revenue move in the same direction along the demand curve, this indicates that demand is ____________

answer

Inelastic

question

If the loss in revenue from a lower price is exactly offset by the gain in revenue from the increase in sales, then the price elasticity of demand is ______.

elastic
unit elastic
perfectly inelastic
inelastic

answer

Unit Elastic

question

If product demand is relatively elastic, what will be the effect on the total revenue if the price is increased?

It cannot be determined.
It decreases.
It increases.
It stays the same.

answer

It decreases.

question

The demand for a heart transplant would be considered price____________

answer

Inelastic

1 of 33

question

The price ______________________ of demand measures the responsiveness, or sensitivity, of consumers to a price change.

answer

Elasticity

question

answer

Because price and quantity demanded are inversely related.

question

What type of demand is represented by a given change in price that leads to a larger change in the quantity demanded?
Multiple choice question.
Cross inelastic
Unit elastic
Inelastic
Elastic

answer

Elastic

question

If a 4% decrease in the price of coffee leads to a 2% increase in the quantity demanded, the price elasticity of demand for coffee is relatively price

answer

Inelastic

question

When demand is relatively price ____________________ , the coefficient for the price elasticity of demand will be less than one.

answer

Inelastic

question

answer

By the price elasticity of demand coefficient

question

A small percentage change in quantity demanded divided by a larger percentage change in price indicates _________________ demand.

answer

Inelastic

question

Economists typically express the elasticity coefficient as an absolute value in order to ______.

emphasize demand
avoid ambiguity
use whole numbers
simplify calculations

answer

avoid ambiguity

question

When demand is unit elastic, the percentage change in quantity demanded is ______ the percentage change in price.

less than
equal to
greater than
not correlated with

answer

equal to

question

A coefficient of price elasticity of demand that is greater than 1 indicates that demand is____________

answer

elastic

question

An addict's demand for heroin is an example of a demand that is perfectly

answer

Inelastic

question

A 5% decline in the price of cut flowers results in a 3% increase in the quantity demanded. Therefore, the demand for cut flowers is ______.

answer

Inelastic

question

When the price elasticity of demand is perfectly______________ , a change in price causes no change in the quantity demanded.

answer

Inelastic

question

If the percentage change in quantity demanded is less than the percentage change in price, then the price elasticity of demand is ______.

cross inelastic
unit elastic
inelastic
elastic

answer

inelastic

question

answer

Inelastic

question

A product that exhibits perfectly elastic demand has a price elasticity coefficient equal to ______.

one
zero
two
infinity

answer

infinity

question

answer

The percentage change in quantity demanded is equal to the percentage change in price.

question

Total revenue is calculated by (multiplying/dividing) the product price by the quantity sold.

answer

multiplying

question

answer

A diabetic's demand for insulin

question

When a change in price does not cause a change in the quantity demanded, the price elasticity of demand is considered ______.

perfectly elastic
perfectly inelastic
unit elastic
cross inelastic

answer

perfectly inelastic

question

If product demand is relatively elastic, what will be the effect on the total revenue if the price is increased?

It cannot be determined.
It stays the same.
It decreases.
It increases.

answer

it decreases

question

When the price elasticity coefficient is equal to infinity, the product exhibits ______ demand.

perfectly elastic
relatively inelastic
perfectly inelastic
unit elastic

answer

perfectly elastic

question

How is total revenue calculated?

Price - Quantity
Price ÷ Quantity
Price + Quantity
Price × Quantity

answer

Price × Quantity

question

When the demand for a product is_______________ and the price is reduced, total revenue will fall.

answer

Inelastic

question

If the price elasticity of demand is unit elastic, the change in price is ______ the change in quantity.

more dominant than
less than
exactly offset by
greater than

answer

exactly offset by

question

answer

increased; decrease

question

Which of the following typically varies over the different price ranges of the same demand curve?

Prices of related goods
Nature of the good
Elasticity
Tastes of consumers

answer

Elasticity

question

For all down-sloping demand curves, the price elasticity of demand is more elastic ______.

at the midpoint of the demand curve
toward the upper left
toward the lower left
toward the lower right

answer

toward the upper left

question

If demand is ______, a price decrease will reduce total revenue.

unit elastic
perfectly elastic
elastic
inelastic

answer

Inelastic

question

When price and total revenue move in the same direction along the demand curve, this indicates that demand is ____________

answer

Inelastic

question

answer

Unit Elastic

question

If product demand is relatively elastic, what will be the effect on the total revenue if the price is increased?

It cannot be determined.
It decreases.
It increases.
It stays the same.

answer

It decreases.

question

The demand for a heart transplant would be considered price____________

answer

Inelastic

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ECONOMICS CHAPTER 6

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