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Suppose QX d = 10,000 – 2 PX + 3 PY – 4.5M , where PX = $100, PY = $50, and M = $2,000. Then good X has a demand which is:
Correct answer(s):
- Inelastic
Suppose QX d = 10,000 – 2 PX + 3 PY – 4.5M , where PX = $100, PY = $50, and M = $2,000. What is the own-price elasticity of demand?
Correct answer(s):
- -0.21
The demand curve for a good is horizontal when it is:
Correct answer(s):
- A perfectly elastic good
Demand is perfectly elastic when the absolute value of the own price elasticity of demand is:
Correct answer(s):
- Infinite
If a price increase from $5 to $7 causes quantity demanded to fall from 150 to 100, what is the absolute value of the own-price elasticity at a price of $7?
Correct answer(s):
- 1.75
If the absolute value of the own-price elasticity of steak is 0.4, a decrease in price will lead to:
Correct answer(s):
- A reduction in total revenue
The quantity consumed of a good is relatively unresponsive to changes in price whenever demand is:
Correct answer(s):
- Inelastic
If quantity demanded sneakers falls by 10% when price increases 25% we know that the absolute value of the own-price elasticity of sneakers is:
Correct answer(s):
- 0.4
If apples have an own-price elasticity of -1.2 we know the demand is:
Correct answer(s):
- Elastic
The own-price elasticity of demand for apples is -1.2. If the price of apples falls by 5%, what will happen to the quantity of apples demanded?
Correct answer(s):
- It will increase 6%
The demand for good X has been estimated by QX d =12 – 3PX + 4PY. Suppose that good X sells at $2 per unit and good Y sells for $1 per unit. Calculate the own price elasticity.
Correct answer(s):
- -0.3
Suppose the demand for a product is QX d = 10 – lnPX then product X is
Correct answer(s):
- Unitary elastic
As we move down along a linear demand curve, the price elasticity of demand becomes more
Correct answer(s):
- Inelastic
A price elasticity of zero corresponds to a demand curve that is:
Correct answer(s):
- Vertical
Consider a market characterized by the following demand and supply conditions: PX = 50 – 5QX and PX = 32 + QX. The equilibrium price and quantity are, respectively,
Correct answer(s):
- $35 and 3 units.
Consider a market characterized by the following demand and supply conditions: PX = 15 – 2QX and PX = 3 + 2QX. The equilibrium price and quantity are, respectively,
Correct answer(s):
- $9 and 3 units.
An excise tax of $1.00 per gallon of….
Correct answer(s):
- by more than $1.00 per gallon.
If A and B are complementary goods, a decrease in the price of good A would:
Correct answer(s):
- lead to an increase in demand for B.
If A and B are substitute goods, a decrease in the price of good A would:
Correct answer(s):
- lead to a decrease in demand for B.
If A and B are substitute goods, an increase in the price of good A would:
Correct answer(s):
- lead to an increase in demand for B.