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Test Canvas : Self-Test Quiz – Chapter 06
Microeconom ics, 3e
Test Canvas: Self-Test Quiz – Chapter 06
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1. Multiple Choice: The price elasticity of demand measur…
Question The price elasticity of demand measures the responsiveness of the quantity:
Answer
Correct
Feedback
Correct! In the formula for elasticity, the percentage change in quantity demanded
is divided by the percentage change in price. Section: Defining and Measuring
Elasticity
Incorrect
Feedback
Incorrect! The price elasticity of demand is measured as the percentage change in
quantity demanded divided by the percentage change in price. Section: Defining
and Measuring Elasticity
demanded to changes in product quality.
2. Multiple Choice: What do you have to know to calculate…
Question What do you have to know to calculate the price elasticity of demand?
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Points: 1
Points: 1
3. Multiple Choice: During a drought, the price elasticit...
Question During a drought, the price elasticity of demand for water is less than one. During a
flood, the price elasticity of demand for water is greater than one. This means that
the:
Elasticity of Demand
4. Multiple Choice: Bar owners often offer lower beer pri...
Question Bar owners often offer lower beer prices to women than they do to men. This will
increase bar revenues:
Answer
if women have a unit-elastic demand for beer.
Points: 1
Points: 1
5. Multiple Choice: When demand is perfectly elastic:
Question When demand is perfectly elastic:
Answer
the demand curve is vertical.
6. Multiple Choice: A bank increased its fees for process...
Question A bank increased its fees for processing personal checks from 18 cents to 24
cents per check. In a statement accompanying the announcement, the bank said
that some customers who reduce the number of checks they write would see no
change in their overall account fee. What is the implication of this statement for
these customers?
Answer
The price elasticity of demand for check writing is less than one.
7. Multiple Choice: If the price elasticity of demand for...
Question If the price elasticity of demand for an annual magazine subscription is 1.6 in the
range between $26 and $30, what happens in the market when the subscription
price rises from $26 to $30?
Answer
Points: 1
Points: 1
Points: 1
8. Multiple Choice: Regardless of the price of ice cream,...
Question Regardless of the price of ice cream, Charlie spends $5 a week on ice cream.
What can we conclude about Charlie’s demand for ice cream?
Answer
His income elasticity of demand for ice cream is equal to one.
9. Multiple Choice: Which of the following statements is ...
Question Which of the following statements is correct?
Points: 1
Points: 1
10. Multiple Choice: Assume the cross-price elasticity of ...
Question Assume the cross-price elasticity of demand for Coke and Pepsi is equal to 3. If
Pepsi raises its price by 10%, then the quantity of:
11. Multiple Choice: The sign (negative or positive) on th...
Question The sign (negative or positive) on the cross-price elasticity of demand for wine and
chocolate tells us:
Answer
whether wine is a normal good.
Points: 1
Points: 1
12. Multiple Choice: What do you have to know in order to …
Question What do you have to know in order to calculate the price elasticity of supply?
Answer
the number of consumers in the market for the good
13. Multiple Choice: The sign (positive or negative) on th...
Question The sign (positive or negative) on the income elasticity of demand tells us:
Answer
the number of substitutes available for the good.
14. Multiple Choice: If the price elasticity of demand (ca...
Question If the price elasticity of demand (calculated using the mid-point method) for –
eBooks is 2.5, and the price of e-Books rises from $18 to $22, then the quantity
demanded will:
Answer decrease by 8%.
Points: 1
Points: 1
Points: 1
15. Multiple Choice: The demand for a good becomes relativ…
Question The demand for a good becomes relatively more elastic as:
16. Multiple Choice: What happens to the elasticity of dem…
Question What happens to the elasticity of demand as we move down to the right along a
straight-line demand curve?
Answer
It changes from a negative number to a positive number.
17. Multiple Choice: What determines the price elasticity ...
Question What determines the price elasticity of supply?
Points: 1
Points: 1
Points: 1
18. Multiple Choice: What situation would make the demand ...
Question What situation would make the demand for new cars relatively more price elastic?
Answer
Auto manufacturers have a difficult time hiring skilled workers.
19. Multiple Choice: You land a marketing job with Canon a...
Question You land a marketing job with Canon after graduation in the digital camera division.
After introducing a new digital camera, you estimate that the price elasticity of
demand for cameras equals 2 and the income elasticity is equal to 0.5.
Furthermore, the cross-price elasticity with a similar Kodak camera is equal to
1.25. Using this information, you would conclude:
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Points: 1
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20. Multiple Choice: You land a marketing job with Canon a...
Question You land a marketing job with Canon after graduation– in the digital camera
division. After introducing a new digital camera, you estimate that the price-
elasticity of demand for the camera equals 2 and the income-elasticity is equal to
0.5. Furthermore, the cross–price elasticity with a similar Kodak camera is equal to
1.25. Using this information, you would conclude that the product is income-:
Answer
elastic. During a period of economic growth, the demand curve for the camera
will shift outward by a greater amount than an income inelastic good.
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Points: 1
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