iVat Chapter 6

A  Business suits and ties.

B  Coffee and sugar.

C  Mercedes-Benz and BMW automobiles.

D  Peanut butter and jelly.

A  Spam.

B  Payless Shoes.

C  Louis Vuitton Shoes.

D  Instant Coffee.

A  disequilibrium.

B  price discrimination where the carrier charges those with greater elasticity a higher fare.

C  price discrimination where the carrier charges those with greater elasticity a lower fare.

D  a price control where the carrier charges those with greater elasticity a higher fare

E  a price control where the carrier charges those with greater elasticity an equal fare

A  TR will initially decrease, but will then subsequently increase.

B  TR will decrease.

C  TR will increase.

D  TR will stay constant.

A  Decrease revenue in the short run but raise revenue in the long run.

B  Raise revenue in the short run but decrease revenue in the long run.

C  Raise revenue in both the short and long run.

D  Decrease revenue in both the short and long run.

E  Decrease revenue only in the short run.

A  TR will stay the same.

B  TR will initially increase, but will subsequently decrease.

C  TR will increase.

D  TR will decrease.

A  In Sacramento is equal to the price elasticity of demand for the State of California.

B  In Sacramento is less than the price elasticity of demand for the State of California.

C  In the State of California is greater than the price elasticity of demand for Sacramento.

D  In Sacramento is greater than the price elasticity of demand for the State of California.

A  Sunglasses.

B  Wheelchair.

C  Apple Computer.

D  Luxury watch.

A  The fewer options that are available for producers to change production.

B  The higher the equilibrium.

C  The fewer the options available for consumers to change consumption.

D  The higher the marginal cost of production.

E  The lower the marginal cost of production.

A  The coffee market’s equilibrium price will drop by a lesser amount, in percentage terms, relative to the luxury watch market.

B  The luxury watch market’s equilibrium price will drop by an equal amount, in percentage terms, relative to the coffee market.

C  The luxury watch market’s equilibrium price will drop by a greater amount, in percentage terms, relative to the coffee market.

D  The coffee market’s equilibrium price will drop by a greater amount, in percentage terms, relative to the luxury watch market.

A  None of the available answers.

B  The price elasticity of demand moves toward being hyper-elastic.

C  The price elasticity of demand moves toward being elastic.

D  The price elasticity of demand moves toward being inelastic.

A  Perfectly inelastic

B  Perfectly elastic

C  Inelastic

D  In equilibrium

E  Elastic

A  Perfectly elastic

B  inelastic

C  Elastic

D  Perfectly inelastic

E  In equilibrium

A  Because you will get differing elasticity figures depending on whether you are analyzing supply or demand.

B  Because you will get differing quantity figures depending on whether you are analyzing a price increase or price decrease.

C  None of the available answers.

D  Because you will get differing elasticity figures depending on whether you are analyzing a price increase or price decrease.

A  Rise by 40%.

B  Fall by 0.93%.

C  Fall by 18.6%.

D  Rise by 49%.

E  Rise by 0.93%.

A  quantity demanded changes 1.2% for each 2% change in price.

B  quantity demanded changes 6% for each 1% change in price.

C  quantity demanded changes 8 units for every $1 change in price.

D  quantity demanded changes for each 9% for each 1% change in price.

E  quantity demanded changes .6 units for every $1 change in price.

A  Because it enables us to compare the price sensitivities of various markets.

B  Because it enables a greater variety of units.

C  Because it complicates the analysis.

D  Because it causes the demand curve to invert.

A  Between 0 and 1.5.

B  Equal to 1.

C  Is elastic in the short run and inelastic in the long run.

D  Less than 1.

E  Greater than 1.

A  Percentage change in quantity demanded divided by percentage change in price.

B  Change in quantity above the equilibrium

C  Change in quantity demanded divided by the change in price.

D  Percentage change in price divided by the percentage change in quantity demanded.

E  Change in price divided by the change in quantity demanded.