45 terms

econ test 2 ch. 4 pt. 1

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If makers of snake antivenom implement significant price increases, it is unlikely to significantly affect the use of antivenom for treating poisonous snakebites. The demand for antivenom among users is
inelastic
If the short run elasticity of demand for a good was greater than 1, an increase in the price of the good would tend to
decrease total revenue in the short run and the long run, but by more in the long run.
The larger the proportion of income spent on a product, other things equal, the
more elastic is a consumer's demand
If a small change in price will lead to an infinite change in the quantity demanded, then the demand curve is
horizontal
What type of demand curve is depicted by the graph below?
perfectly elastic
A steel mill raises the price of steel by 20%, which results in a 7% reduction in the quantity of steel demanded. The demand curve facing this firm is
inelastic
When demand is elastic:
all of the above are correct.
When the Blue Ocean Surfboard Company lowered the price of surfboards by 20%, it sold 10% more surfboards. The price elasticity coefficient for surfboards is:
1/2
The longer the time period considered, the price elasticity of demand tends to:
increase.
Which of the following is most likely to feature inelastic demand with regard to price?
an authentic Queen Anne chair
A popular drink like Coca-cola has ____ demand elasticity than beverages as a whole.
a lower
When demand is relatively inelastic, a 5% increase in price will:
increase total revenue by less than 5%
What type of demand curve is depicted by the graph below?
perfectly inelastic
Demand is said to be ____ when the quantity demanded changes the same proportion as the price.
unit elastic
If a university charged a lower price for tuition during summer school than during the regular session, in search of added total revenue
administrators likely believe that demand is more elastic during summer school than during the regular session.
What type of demand curve is depicted by the graph below?
perfectly elastic
When the Blue Ocean Surfboard Company lowered the price of surfboards by 20%, it sold 10% more surfboards. The price elasticity coefficient for surfboards is:
1/2.
If the demand curve for a product is horizontal, then the elasticity of demand is:
equal to infinity.
If a small change in price will lead to an infinite change in the quantity demanded, then the demand curve is:
horizontal.
Which of the following is associated with inelastic demand?
a limited amount of time for consumers to respond to a price change
Which of the following is false?
All of the above are true.
Put the following products in order from the least to the most elastic demand: Domino's pizza, pizza, and pizza from Domino's on the corner of Main Street and 8th Avenue.
pizza; Domino's pizza; pizza from Domino's on the corner of Main Street and 8th Avenue
If the demand curve is perfectly elastic, the elasticity coefficient is ____ and the curve is ____.
infinity, horizontal
A popular drink like Coca-cola has ____ demand elasticity than beverages as a whole.
a lower
For a given increase in price, a greater elasticity of demand will result in a greater
decrease in quantity demanded.
A movie theatre raises its admission prices by 10%, which results in a 10% reduction in the quantity of tickets demanded. The demand curve facing this firm is:
unit elastic.
The longer the time period considered, the price elasticity of demand tends to:
increase.
If the short-run elasticity of demand for bus service is 1.01, we would expect the long-run elasticity of demand to be:
greater than 1.01
If the short run elasticity of demand for a good was greater than 1, an increase in the price of the good would tend to
decrease total revenue in the short run and the long run, but by more in the long run.
If the price elasticity of demand was 4.0 (in absolute terms), a 10% off sale would lead to:
a 40% increase in purchases by customers.
Demand is said to be ____ when the quantity demanded changes the same proportion as the price.
unit elastic
When demand is relatively inelastic, a 5% increase in price will
increase total revenue by less than 5%.
Which of the following is not a major determinant of the price elasticity of demand?
quantity of goods available
If the demand curve is perfectly elastic, then an increase in supply will:
increase the quantity exchanged but result in no change in the price
The Shoe Emporium reduces the price of its shoes by 50% and finds that the quantity demanded for its shoes more than doubles. The demand for shoes from The Shoe Emporium appears to be:
elastic.
If the demand is perfectly inelastic, what would happen to the quantity demanded if there is a tiny increase in price?
quantity demanded will remain the same
The longer the time period considered, the price elasticity of demand tends to
increase.
If the price elasticity of demand was 4.0 (in absolute terms), a 10% off sale would lead to:
a 40% increase in purchases by customers.
If the elasticity of demand coefficient for a good is 6 (in absolute terms), we know:
that for every 6% increase in quantity, there will be a 1% decrease in price.
If the demand curve for a life-saving medicine is perfectly inelastic, a reduction in supply will cause the equilibrium price to:
rise and the equilibrium quantity to stay the same.
If the elasticity of demand coefficient for a good is 6 (in absolute terms), we know:
that for every 6% increase in quantity, there will be a 1% decrease in price.
The price elasticity of demand coefficient for gourmet coffee is estimated to be equal to 1.6. It is expected, therefore, that a 5% increase in price would lead to:
an 8% decrease in the quantity of gourmet coffee demanded.
Which of the following is associated with elastic demand?
all of the above
If the demand is perfectly elastic, what would happen to the quantity demanded if there is a tiny increase in price?
quantity demanded will fall to zero
If the demand is perfectly inelastic, what would happen to the quantity demanded if there is a tiny increase in price?
quantity demanded will remain the same