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Figure: The Demand Curve
Reference: Ref 6-8
(Figure: The Demand Curve) Between the prices of $4 and $5, demand is _______,
and total revenue will _________ if price increases.
Answer elastic; increase
101. Multiple Choice: Suppose the price of barley increases...
Question Suppose the price of barley increases by 16.53%. If breweries buy 3.28% less
barley after the price increase, the total revenue for barley producers will ________
because the ________ effect is greater than the ________ effect.
Answer decrease; quantity; price
102. Multiple Choice: If demand is elastic, then:
Question If demand is elastic, then:
Answer the price effect dominates the quantity effect, and a fall in the price will cause
total revenue to rise.
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103. Multiple Choice: Suppose the price elasticity of deman...
Question Suppose the price elasticity of demand for oranges is 1.8. If a fall frost destroys
one-third of the nation's orange crop, how will that affect total revenue from oranges,
all other things unchanged?
Answer Total revenue will rise.
104. Multiple Choice: The price elasticity of demand for ga...
Question The price elasticity of demand for gasoline in the short run has been estimated to
be 0.4. If a war in the Middle East causes the price of oil (from which gasoline is
made) to increase, how will that affect total revenue from gasoline in the short run,
all other things unchanged?
Answer Quantity demanded will stay the same; total revenue will fall.
105. Multiple Choice: The price elasticity of demand for le...
Question The price elasticity of demand for lettuce has been estimated to be 2.58. If an
insect infestation destroys 10% of the nation's lettuce crop, how will that affect
total revenue from lettuce, all other things unchanged?
Answer Total revenue will remain unchanged.
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106. Multiple Choice: The price elasticity of demand for fr...
Question The price elasticity of demand for fresh tomatoes has been estimated to be 2.22. If
a new insecticide and fertilizer treatment yields a 20% increase in the nation's
fresh tomato crop, how will that affect total revenue from fresh tomatoes, all other
things unchanged?
Answer Total revenue will remain unchanged.
107. Multiple Choice: Which of the following is not true re...
Question Which of the following is not true regarding a price-elastic demand curve?
Answer Total revenue increases when the price falls.
108. Multiple Choice: The demand for agricultural output is...
Question The demand for agricultural output is price inelastic. This means that if farmers,
taken collectively, have a bumper crop, they will experience:
higher prices, higher quantities sold, and higher incomes.
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109. Multiple Choice: When a public transit system (such as...
Question When a public transit system (such as a subway or bus line) raises its fares, it
may experience an increase in total revenue. This suggests that demand is:
Answer unstable.
110. Multiple Choice: If a university decreases the price o...
Question If a university decreases the price of tickets to football games to collect more
revenue, it is assuming that the demand for tickets is:
Answer unstable.
111. Multiple Choice: If the demand for golf is price-inela...
Question If the demand for golf is price-inelastic and your local public golf course increases
the greens fees for using the course, you would expect:
Answer a decrease in total revenue received by the course.
112. Multiple Choice: If the demand for golf is unit-price ...
Question If the demand for golf is unit-price elastic and your local public golf course
increases the greens fees for using the course, you would expect:
Answer a decrease in total revenue received by the course.
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113. Multiple Choice: Figure: The Demand for Notebook Compu...
Question Figure: The Demand for Notebook Computers
Reference: Ref 6-9
(Figure: Demand for Notebook Computers) Look at the figure The Demand for
Notebook Computers. The change in total revenue resulting from a change in price
from P to T suggests that demand is:
114. Multiple Choice: Figure: The Demand for Notebook Compu...
Question
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Figure: The Demand for Notebook Computers
Reference: Ref 6-9
(Figure: Demand for Notebook Computers) Look again at the figure The Demand for
Notebook Computers. Total revenue at point S equals the:
115. Multiple Choice: Figure: The Demand for Notebook Compu...
Question
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Figure: The Demand for Notebook Computers
Reference: Ref 6-9
(Figure: Demand for Notebook Computers) Look again at the figure The Demand for
Notebook Computers. Total revenue at point V equals the:
116. Multiple Choice: If a change in price causes total rev...
Question If a change in price causes total revenue to change in the same direction, we can
conclude that the demand is:
117. Multiple Choice: There is one gas station in a small r...
Question
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There is one gas station in a small rural town. The owner of the station claims that
he will sell the same quantity of gas no matter how high or low the price. If he is
correct in this assertion, what must be true about the demand curve for gas at his
station?
118. Multiple Choice: Demand for vegetables at a small farm...
Question Demand for vegetables at a small farmers' market is steady, but the supply of
vegetables has decreased because of a drought. This is good news for farmers if
demand is:
119. Multiple Choice: In the market for computers, if the d...
Question In the market for computers, if the demand curve is elastic and the price of a
computer decreases, we would expect total revenue to ________. If the demand
curve is inelastic and the price of a computer decreases, we would expect total
revenue to ________.
120. Multiple Choice: If a 20% price increase generates a 2...
Question If a 20% price increase generates a 20% decrease in quantity demanded, then this
is ________ response.
Answer an inelastic
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121. Multiple Choice: If an increase in the price of cotton...
Question If an increase in the price of cotton increases total revenue, then the price effect is
________ the quantity effect.
Answer equal to
122. Multiple Choice: After a price decrease, the quantity ...
Question After a price decrease, the quantity effect tends to:
Answer decrease total revenue.
123. Multiple Choice: Yovanka has diabetes and she will pay...
Question Yovanka has diabetes and she will pay any amount of money to buy the insulin
she needs to stay alive. Yovanka's demand for insulin is:
Answer price-inelastic.
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124. Multiple Choice: Which of the following is true about ...
Question Which of the following is true about the price elasticity of demand?
Answer When demand is perfectly inelastic, a rise in the price leads to a decrease in
total revenue.
125. Multiple Choice: Figure: Demand Curves Reference: Ref ...
Question Figure: Demand Curves
Reference: Ref 6-10
(Figure: Demand Curves) Look at the figure Demand Curves. Which graph shows a
perfectly elastic demand curve?
Answer A
126. Multiple Choice: Figure: Demand Curves Reference: Ref ...
Question
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Figure: Demand Curves
Reference: Ref 6-10
(Figure: Demand Curves) Look again at the figure Demand Curves. Which graph
shows a perfectly inelastic demand curve?
Answer A
127. Multiple Choice: Figure: Demand Curves Reference: Ref ...
Question Figure: Demand Curves
Reference: Ref 6-10
(Figure: Demand Curves) Look again at the figure Demand Curves. Gala apples are
a type of apple that has many substitutes and is not very expensive. Which graph
best represents the demand schedule for Gala apples?
Answer A
128. Multiple Choice: Suppose that an increase in the price...
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Question Suppose that an increase in the price of a good leads to an increase in total
revenue. Ignoring other factors (like supply), at its current price the good must be:
inferior.
129. Multiple Choice: When the percentage change in quantit...
Question When the percentage change in quantity demanded is larger than the percentage
change in price, demand is said to be:
Answer price-inelastic.
130. Multiple Choice: If the price elasticity of demand is ...
Question If the price elasticity of demand is calculated to be 3/4, then demand is:
positively sloped.
131. Multiple Choice: If the price elasticity of demand is ...
Question If the price elasticity of demand is found to be 6, then demand is:
Answer price-inelastic.
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horizontal.
132. Multiple Choice: If the price of a good increases by 1...
Question If the price of a good increases by 15% and the quantity demanded falls by 20%,
demand is:
normal.
133. Multiple Choice: If total revenue goes up when the pri...
Question If total revenue goes up when the price falls, demand is said to:
Answer be price-inelastic.
134. Multiple Choice: If total revenue goes down when the p...
Question If total revenue goes down when the price falls, demand is said to:
have positive price elasticity.
135. Multiple Choice: If the quantity demanded of agricultu...
Question If the quantity demanded of agricultural output is very unresponsive to a fall in price,
the demand for agricultural output is:
Answer price-elastic.
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136. Multiple Choice: Which of the following will lead to a...
Question Which of the following will lead to a decrease in total revenue?
Answer The price goes up and demand is perfectly inelastic.
137. Multiple Choice: If the University of Michigan increas...
Question If the University of Michigan increases the price of football tickets, this will result in
increasing revenues if demand:
is perfectly elastic.
138. Multiple Choice: Figure: Estimating Price Elasticity R...
Question
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Figure: Estimating Price Elasticity
Reference: Ref 6-11
(Figure: Estimating Price Elasticity) Look at the figure Estimating Price Elasticity.
Between the two prices, P1 and P2, which demand curve has the lowest price
elasticity?
Answer D1
139. Multiple Choice: Figure: Estimating Price Elasticity R...
Question Figure: Estimating Price Elasticity
Reference: Ref 6-11
(Figure: Estimating Price Elasticity) Look again at the figure Estimating Price
Elasticity. Between the two prices, P1 and P2, which demand curve has the
highest price elasticity?
Answer D1
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140. Multiple Choice: Figure: The Demand Curve for Oil Refe...
Question Figure: The Demand Curve for Oil
Reference: Ref 6-12
(Figure: The Demand Curve for Oil) Look at the figure The Demand Curve for Oil. In
the figure, the price elasticity of demand between $20 and $21 is:
Answer price-elastic, since the price elasticity is less than 1.
141. Multiple Choice: Figure: The Demand Curve for Oil Refe...
Question
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Figure: The Demand Curve for Oil
Reference: Ref 6-12
(Figure: The Demand Curve for Oil) Look at the figure The Demand Curve for Oil. In
the figure, demand is price ________ between $20 and $21, since total revenue
________ when the price ________.
Answer elastic; increases; decreases
142. Multiple Choice: Figure: The Demand Curve for Bridge C...
Question
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Figure: The Demand Curve for Bridge Crossings
Reference: Ref 6-13
(Figure: The Demand Curve for Bridge Crossings) Look at the figure The Demand
Curve for Bridge Crossings. The price elasticity of demand between $0.90 and
$1.10 in the figure is:
Answer price-elastic, since the price elasticity is less than 1.
143. Multiple Choice: Figure: The Demand Curve for Bridge C...
Question Figure: The Demand Curve for Bridge Crossings
Reference: Ref 6-13
(Figure: The Demand Curve for Bridge Crossings) Look again at the figure The
Demand Curve for Bridge Crossings. Demand is price________ between $0.90 and
$1.10, since total revenue ________ when the price ________.
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Answer elastic; increases; decreases
144. Multiple Choice: Figure: The Demand for Shirts Referen...
Question Figure: The Demand for Shirts
Reference: Ref 6-14
(Figure: The Demand for Shirts) Look at the figure The Demand for Shirts. Using
the midpoint method, the price elasticity of demand for the segment AB is:
Answer less than the price elasticity of demand for the segment BC.
145. Multiple Choice: Figure: The Demand for Shirts Referen...
Question
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Figure: The Demand for Shirts
Reference: Ref 6-14
(Figure: The Demand for Shirts) Look at the figure The Demand for Shirts. Using
the midpoint method, the price elasticity of demand for the segment BC is:
less than the price elasticity of demand for the segment CD.
146. Multiple Choice: Figure: The Demand for Shirts Referen...
Question
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