Principles of Microeconomics 6Th Edition Frank Test Bank Full Chapter PDF
Principles of Microeconomics 6Th Edition Frank Test Bank Full Chapter PDF
Principles of Microeconomics 6Th Edition Frank Test Bank Full Chapter PDF
0073517852 9780073517858
1. The price elasticity of demand for a good measures the responsiveness of:
A. the change in quantity demanded of a good that results from a change in its price.
B. the change in price of a good that results from a change in its quantity demanded.
C. the demand for a good.
D. how consumers respond to excess demand.
3. The percentage change in quantity demanded that results from a 1 percent change in price is known as the:
4. When calculating price elasticity of demand, if the percentage change in price is negative, then the percentage change in quantity demanded is typically:
5. If the price of cheese falls by 1 percent and the quantity demanded rises by 3 percent, then the price elasticity of demand for cheese is equal to:
A. 30.
B. 0.30.
C. 0.333.
D. 3.
6. If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent, then the price elasticity of demand is equal to:
A. 0.05.
B. 0.5.
C. 2.
D. 5.
7. If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent, then demand for textbooks is:
A. negative.
B. inelastic.
C. elastic.
D. unit elastic.
8. The price elasticity of demand is typically expressed as a positive number because:
9. If the absolute value of the price elasticity of demand for tickets to a football game is 2, then if the price increases by 1%, quantity demanded decreases by:
A. ½%.
B. 1%.
C. 2%.
D. 4%.
10. If the absolute value of the price elasticity of demand for cell phone service is 3, then if the price of cell phone service increases by 1%, quantity demanded would:
A. increase by 0.33%.
B. decrease by 0.33%.
C. increase by 3%.
D. decrease by 3%.
11. If 20% increase in the price of a good leads to a 60% decrease in the quantity demanded, then what is the price elasticity of demand?
A. 30.
B. 3.
C. 1/3.
D. 1/6.
12. If a 10% decrease in the price of a good leads to a 20% increase in the quantity demanded, then what is the price elasticity of demand?
A. ½.
B. 2.
C. 10.
D. 20.
13. If the price elasticity of demand for pineapples is 0.75, then a 4% increase in the price of pineapples will lead to a:
14. If the price elasticity of demand for chicken is 2, then a 20% decrease in the price of chicken will lead to a:
15. If the price elasticity of demand for cigarettes is 0.55, and the price of cigarettes increases by 10 percent, then the quantity of cigarettes demanded will fall by:
A. 0.55 percent.
B. 5.5 percent.
C. 55 percent.
D. 550 percent.
16. The demand for a good is elastic if the price elasticity of demand is:
A. equal to one.
B. greater than one.
C. less than one.
D. equal to zero.
17. If the price elasticity of demand for a good is greater than one, then the demand for that good is:
A. elastic.
B. inelastic.
C. unit elastic.
D. perfectly elastic.
18. The demand for a good is inelastic with respect to price if the price elasticity of demand is:
A. equal to one.
B. greater than one.
C. less than one.
D. equal to negative one.
19. The demand for a good is unit elastic with respect to price if the price elasticity of demand is:
A. equal to one.
B. greater than one.
C. less than one.
D. greater than negative one.
20. If the price elasticity of demand for a good equals one, then the demand for that good is:
A. elastic.
B. inelastic.
C. unit elastic.
D. perfectly elastic.
21. When the price of hot dogs is $1.50 each, 500 hot dogs are sold every day. After the price falls to $1.35 each, 510 hot dogs are sold every day. At the original price, what is the price elasticity of demand for hot
dogs?
A. 66.67
B. 5
C. 2
D. 0.2
22. When the price of NBA tickets is $25 each, 30,000 tickets are sold. After the price rises to $30 each, 20,000 tickets are sold. At the original price, the demand for NBA ticket is:
A. elastic.
B. inelastic.
C. unit elastic.
D. perfectly elastic.
23. If the percentage change in the price of a good is less than the resulting percentage change in the quantity demanded of that good, then the demand for that good is:
A. elastic.
B. inelastic.
C. unit elastic.
D. perfectly inelastic.
24. If consumers respond to a 10% price reduction by buying twice as much of a particular good, we would conclude that:
25. Suppose a 10% increase in the price of aspirin leads to a 5% decrease in the quantity demanded of aspirin. The demand for aspirin, therefore, is
A. elastic.
B. inelastic.
C. unit elastic.
D. perfectly inelastic.
26. If the percentage change in the price of a good is equal to the percentage change in the quantity demanded of that good, then the demand for that good is:
A. elastic.
B. inelastic.
C. unit elastic.
D. perfectly elastic.
27. If the demand for a good is highly elastic, that good is likely to have:
28. If consumers can easily switch to a close substitute when the price of a good increases, demand for that good is likely to be:
A. elastic.
B. inelastic.
C. unit elastic.
D. perfectly inelastic.
29. When the demand for a good is inelastic, that good is likely to have:
30. If consumers cannot readily switch to a close substitute when the price of a good increases, the demand for that good is likely to be:
A. elastic.
B. inelastic.
C. unit elastic.
D. perfectly elastic.
31. Which of the following is likely to have the highest price elasticity of demand?
A. shoes
B. running shoes
C. Nike running shoes
D. The price elasticity of demand will be the same for all of the answers listed.
32. For which of the following products is demand likely to be least elastic with respect to price?
A. Food
B. Vegetables
C. Green vegetables
D. Green beans
33. Suppose the company that owns the vending machines on your campus has doubled the price of a can of soda. They then notice that they are selling approximately 15% fewer sodas. The price elasticity of
demand for sodas from the campus vending machines, therefore, is:
A. inelastic
B. unit elastic
C. elastic
D. infinite
34. Suppose the company that owns the vending machines on your campus has doubled the price of a can of soda. If they then still sell almost the same number of sodas per day, this suggests:
35. Suppose the price of a Snickers candy bar is $2.00 at both the airport and the grocery store. The price elasticity of demand for a Snickers candy bar at an airport is likely to be ______ the price elasticity of
demand for a Snickers candy bar at the grocery store.
A. less than
B. equal to
C. greater than
D. the reciprocal of
36. All else equal, the price elasticity of demand for a good tends to be lower:
37. Jeans in general have fewer close substitutes than a specific brand of jeans. Therefore, the demand for jeans in general will be _______ than the demand for a specific brand of jeans.
A. more elastic
B. less elastic
C. more unit elastic
D. less inelastic
38. Satellite TV is a close substitute for cable TV. In the 1990's, small satellite TV units were developed that made it less costly for individual consumers to subscribe to satellite TV service. This caused the price
elasticity of demand for cable TV service to:
39. Suppose that the demand for electricity has been found to be price inelastic. The most likely explanation for this finding is that:
40. Suppose that there is only one small clothing store in the remote village of Green Acres, and until recently the townspeople bought their shirts there. As more people in Green Acres become connected to the
Internet, the price elasticity of demand for shirts at the Green Acres store will:
41. All else equal, the price elasticity of demand for small-budget items such as soap tends to be ______ than the price elasticity of demand for big-ticket items such as flat-screen TVs.
A. higher
B. lower
C. very high
D. the same
42. All else equal, compared to small-budget items such as paper towels, the price elasticity of demand for big-ticket items such as refrigerators is ______.
A. higher B.
lower C.
very low D.
equal
43. You would expect the price elasticity of demand for transportation generally to be:
Demand tends to be ______ in the short run than in the long run.
A. more elastic B.
less elastic C.
more variable D.
less important
45. Suppose you have one hour to catch a flight to Miami for spring break, and it takes 45 minutes to drive to the airport. Your car is almost out of gas and the price of gas at the closest gas station is higher than at
other gas stations that are much farther away. To you, the price elasticity of demand for gas is likely to be ______ than it would be if you had several hours before the flight.
A. higher
B. lower
C. more variable
D. no different
46. Assume the price of gasoline doubles tonight and remains at that price for the next two years. Compared with the long-run price elasticity of demand for gasoline, the short-run price elasticity of demand for
gasoline will be ______.
A. higher
B. more variable
C. the same
D. lower
47. The reason a brand name item (e.g., Tyson chicken) has a larger price elasticity than a class of items (e.g., chicken) is that:
A. there are fewer substitutes for Tyson chicken than for chicken generally.
B. it takes a lot of time to adjust to a substitute brand of chicken.
C. the share of income spent on "chicken" is larger than spent on "Tyson Chicken".
D. there are fewer substitutes for chicken generally than for Tyson chicken.
48. Suppose that the short-run price elasticity of demand for electricity is 0.03, and the long-run price elasticity of demand is 1.2. One would classify the short-run elasticity as being ___________ and the long-run
elasticity as being ____________.
A. elastic; elastic
B. elastic; inelastic
C. inelastic; unit elastic
D. inelastic; elastic
49. Economists have found that the price elasticity of demand for water is higher in the summer than in the winter. Why is this likely to be so?
A. Winter is longer than summer, and price elasticity is lower over longer time horizons.
B. Summer is longer than winter, and price elasticity is higher over longer time horizons.
C. Winter water use tends to be for necessities such as cleaning and cooking, and summer water use tends to be for both necessities and non-necessities such as gardening and recreation.
D. People take more vacations in the summer and so use less water at home.
50. If the elasticity of demand for the latest American Idol album is 1.4, this means
51. Suppose you learn that in 1900, households spent about 40 percent of their budget on food, and today, they spend about 10 percent of their budget of food. All else equal, this suggests that the price elasticity of
demand for food:
A. is probably negative.
B. has always been very high.
C. is probably lower now than it was in 1900.
D. is probably higher now than it was in 1900.
52. If the quantity demanded of a good is Q when the price for the good is P, the price elasticity of demand for that good at that point is:
A. (P/Q) × (1/slope)
B. (Q/P) × (1/slope)
C. (P/Q) × (slope)
D. Q × P × (1/slope)
53. If the absolute value of slope of the demand curve is 2.5, price is $6 per unit, and the quantity demanded is 8 units, then the price elasticity of demand is:
A. 0.3.
B. 0.533.
C. 1.6.
D. 1.875.
54. If the absolute value of the slope of the demand curve is 0.25, price is $8 per unit, and quantity demanded is 12 units, then demand for this good is:
A. perfectly elastic.
B. elastic.
C. unit elastic.
D. inelastic.
The slope of the demand curve (ignoring the negative sign) is:
A. 2.
B. 1.5.
C. 1.
D. 0.5.
56. The following graph depicts demand.
A. 5/2.
B. 5/8.
C. 2/5.
D. 8/5.
57. The following graph depicts demand.
A. inelastic.
B. elastic.
C. unit elastic.
D. perfectly elastic.
58. The following graph depicts demand.
A. 3/4.
B. 4/3.
C. 3.
D. 1/3.
59. The following graph depicts demand.
A. 3/16.
B. 16/3.
C. 3/4.
D. 3/8.
60. The following graph depicts demand.
A. 5/2.
B. 1/2.
C. 2/5.
D. 2.
61. The following graph depicts demand.
A. price inelastic.
B. price elastic.
C. unit elastic.
D. perfectly price elastic.
62. Suppose two demand curves intersect and so have a point in common. At that point, demand shown by the steeper curve will be _______ the flatter curve.