21. Assume that demand increases by 1 percent , the absolute value of price elas
ID: 1215516 • Letter: 2
Question
21. Assume that demand increases by 1 percent , the absolute value of price elasticity of demand is 1.0, and price elasticity of supply is 1.0. What is the percentage price change in this case?
A.) -1.5
B.) -0.5
C.) 0.5
D.) 1.5
The table lists the characteristics of three goods. Good_______ is the most inelastic, and Good_____ is the most elastic.
A.) X;Y
B.) Z; Y
C.) X;Z
D.) Y;X
23. If the price elasticity of demand for a product is 2 in absolute value, and the price elasticity of supply for the same product is 1, what is the predicted percent change in price from a 5 percent fall in the supply?
A.) a 1.67 percent fall in price
B.) a 1.67 percent rise in price
C.) a 0.6 percent fall in price
D.) a 0.6 percent rise in price
24. The case for drilling oil in ANWR is strengthened when the:
A.) price of oil is lower.
B.) negative impact of frilling on the environment is greater
C.) price of oil is higher
D.) elasticity of demand for oil increases
25. The quantity demanded for cosmetic surgery increased by 12 percent following a period of strong econmic growth that raised consumer income by 4 percent. What type of good is cosmetic surgery?
A.) It is a luxury good since the income elasticity of dmand exceeds 1.
B.) It is a normal good since the income elasticity is less than 1.
C.) It is a necessity since the income elasticity of demand is equal to 1.
D.) It is a supernormal good since the income elasticity is greater than 2.
26. If both the supply of and the demand for a good are highly elastic, a shift of either curve will always result in
A.) a decrease in price
B.) an increase in price
C.) a large change in quantity.
D. no change
27. (Figure: Slave Redemtion and Elasticity) Refer to the Figure. Assume the graph illustrates the Sudanese slave trade. How many slaves are freed after the redemption program?
A.)1,000
B.) 400
C.) 600
D.) 1,400
28.The price of cigars is $10, with a quantity demanded of 1,000 per day. If the price increases to $12, the quantity demanded declines to 800 per day. What is the absolute value of elasticity of demand?
A.) 1.00
B.) 0.82
C.) 1.22
D.) 12.2
29. If the price of cocoa rises by 20 percent, the quantity supplied of cocoa rises by 4 percent. What is the elasticity of supply?
A.) 5
B.) 2
C.) 0.2
D.) 0.008
30. If the supply of rental housing increase causing its price to fall and apartment dwellers move into bigger apartments that cost the same as their old ones, we can infer that the:
A.) demand for apartments is elastic
B.) supply of apartments is unit elastic
C. demand for aprtments is unit elastic
D.) demand for apartments is inelastic.
Explanation / Answer
Q21. 0.5
Q 22. Z,Y
Q23. 1.67 % rise in price
Q24. Price of oil is higher
Q25. It is a luxury good since the income elasticity of dmand exceeds 1.
Q26. A decrease in price
Q27. 400
Q28. 1.22
Q29. 0.2
Q30. Supply for apartments is unit elastic
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.