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Question 1 of 20

5.0 Points

The price elasticity of demand reflects the responsiveness of __________ .

A. firms to changes in demand

B. demand to a change in price of a substitute good

C. demand to a change in price

D. quantity demanded to a change in price

Question 2 of 20

5.0 Points

In considering the relationships between price and quantity demanded, ceteris paribus directs

the economist to assume that __________ .

A. price increases affect quantity

B. quantity increases affect prices

C. neither price nor quantity affect demand

D. all other variables remain unchanged

Question 3 of 20

5.0 Points

The price of apples increases from $1 to $1.10. At the same time, the quantity of apples

demanded decreases from 100 to 90. The price elasticity of demand for apples (calculated using

the initial value formula) is __________ .

A. 0.02

B. 0.9

C. 1

D. 1.1

Question 4 of 20

5.0 Points

Suppose that Victoria and her friends are running a fundraiser by selling donuts. They want to

know what will happen to their revenue if they increase the price of each donut from $0.80 to

$1. What concept do they need to apply to find out their expected revenue?

A. price elasticity of supply

B. price elasticity of demand

C. cross elasticity of demand

D. income elasticity of demand

Question 5 of 20

5.0 Points

The quantity of pencils sold is 1000 at the unit price $0.5. Suppose the price elasticity of

demand for pencils by the initial value method is 2, and you would like to increase the quantity

sold to 1200. Then the new price for pencils must be __________ .

A. $0.05

B. $0.25

C. $0.30

D. $0.45

Question 6 of 20

5.0 Points

A good synonym for elasticity would be __________ .

A. change

B. demand

C. responsiveness

D. stickiness

Question 7 of 20

5.0 Points

The price elasticity of demand is calculated by __________ .

A. the change in price divided by the change in quantity demanded

B. the change in quantity demanded divided by the change in price

C. the percentage change in price divided by the percentage change in quantity demanded

D. the percentage change in quantity demanded divided by the percentage change in price

Question 8 of 20

5.0 Points

The market demand curve __________ .

A. shows the relationship between the price of a good and the quantity that all consumers

together are willing to buy

B. is drawn assuming that variables such as income and tastes are variable

C. is drawn assuming that the number of consumers is variable

D. is drawn assuming that the selling price is fixed

Question 9 of 20

5.0 Points

When demand decreases and the demand curve shifts to the left, equilibrium price __________

and equilibrium quantity __________ .

A. increases; increases

B. increases; decreases

C. decreases; increases

D. decreases; decreases

Question 10 of 20

5.0 Points

When there is a change in the quantity demanded it means that __________ .

A. the hours the customer can buy products each day have increased

B. the number of products in inventory have increased

C. the quantity a consumer is willing to buy changes when the price changes

D. the selling price of the products has not changed

Question 11 of 20

5.0 Points

Suppose that there are only three consumers of a product. At a price of $6 per unit, the first

consumer would buy 12 units of the product, the second consumer would buy 8 units, and the

third consumer would buy 3 units of the product. If you drew a market demand curve for this

product, the quantity demanded at a price of $6 would be __________ .

A. 23 units

B. 20 units

C. 12 units

D. 11 units

Question 12 of 20

5.0 Points

Suppose that in a month the price of oranges increases from $.75 to $1. At the same time, the

quantity of oranges demanded decreases from 100 to 80. The price elasticity of demand for

oranges (calculated using the initial value formula) is __________ . ?

A. 0.75

B. 0.6

C. 0.25

D. 20

Question 13 of 20

5.0 Points

A demand curve is defined as the relationship between __________ .

A. the price of a good and the quantity of that good that consumers are willing to buy

B. the price of a good and the quantity of that good that producers are willing to sell

C. the income of consumers and the quantity of a good that consumers are willing to buy

D. the income of consumers and the quantity of a good that producers are willing to sell

Question 14 of 20

5.0 Points

The quantity of TVs sold is 100 at the unit price $200. Suppose the price elasticity of demand for

TVs by the initial value method is 2.0, and you would like to decrease the unit price for TVs to

$150. Then the new quantity sold must be __________ .

A. 125

B. 150

C. 200

D. 250

Question 15 of 20

5.0 Points

Suppose that in a month the price of milk increases from $2 to $3 a gallon. At the same time,

the quantity of gallons of milk demanded decreases from 200 to 190. The price elasticity of

demand for milk (calculated using the initial value formula) is __________ .

A. 0.1

B. 0.2

C. 1

D. 10

Question 16 of 20

5.0 Points

The quantity demanded of a product increases as __________ .

A. consumer income rises

B. the prices of other products fall

C. the price of the product rises

D. the price of the product falls

Question 17 of 20

5.0 Points

The ratio of the percentage change in quantity demanded to the percentage change in price is

known as the __________ .

A. demand-side shift factor

B. income elasticity of demand

C. price elasticity of demand

D. cross elasticity of demand

Question 18 of 20

5.0 Points

The Law of Demand can be explained as __________ .

A. a lot of people wanting the same thing

B. the higher the price, the smaller the quantity demanded, ceteris paribus

C. people willing to make limited sacrifices to acquire products

D. legal reasons people make purchases in the marketplace

Question 19 of 20

5.0 Points

A change in the quantity demanded of a product is the result of a change in __________ .

A. the price of the product

B. the price of related goods

C. consumer income

D. the cost of producing the product

Question 20 of 20

5.0 Points

Suppose that in a month the price of a dozen of eggs increases from $1.50 to $2. At the same

time, the quantity of dozens of eggs demanded decreases from 200 to 150. The price elasticity

of demand for dozens of eggs is __________ .

A. perfectly inelastic

B. inelastic

C. unitary elasticÂ

D. elastic

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