Quiz 4

A  Price will relatively decrease less than the increase in quantity.

B  Price and quantity will change by the same amount.

C  Price will relatively decrease greater than the increase in quantity.

A  Total revenue falls, since demand changes and becomes price elastic.

B  Total revenue will fluctuate as the demand fluctuates.

C  Total revenue rises immediately, since demand will remain price inelastic.

A  Total revenue will rise incrementally as the demand fluctuates and price moves back and forth between being elastic and inelastic.

B  Total revenue rises immediately after the fare increase, since demand over the immediate period is price inelastic.

C  Total revenue falls, since demand changes and becomes price inelastic.

A  the goods’ income elasticities are less than zero.

B  the goods’ price elasticities of demand are less than one.

C  the goods’ cross price elasticities are greater than zero.

A  inferior goods.

B  substitutes.

C  complements.

A  price elasticity of demand for soda is 3.

B  cross-price elasticity of demand for soda is -3.

C  price elasticity of demand for potato chips is 3.

A  the income elasticity is .6 and the good is an inferior good.

B  the income elasticity is 1.67 and the good is a normal good.

C  the cross-price elasticity is .6 and the good is an inferior good.

A  price elasticity of demand of pears is 0.75.

B  price elasticity of demand of apples is 1.33.

C  cross-price elasticity of pears is 0.75.

A  adult; elastic.

B  teenager; elastic.

C  adult; inelastic.

A  What quantity should producers sell to maximize profit?

B  How responsive are consumers and producers to changes in price?

C  How will consumer behavior change with a technological innovation?

A  availability of substitutes.

B  slope of the supply curve.

C  luxuries versus necessities.

A  short run versus long run

B  share of the consumer budget

C  slope of the supply curve

A  What is the least amount of goods a supplier can produce without upsetting the customers?

B  How will a change in consumer behavior affect the overall consumer experience?

C  How much will a change in price or quantity impact consumer and producer behavior?

A  supply and demand model

B  elasticity

C  scarcity.

A  how long it takes a market to reach equilibrium.

B  how frequently a demand curve or supply curve changes slope.

C  how responsive one variable is to changes in another.

A  how a change in price affects quantity supplied, how a change in price affects quantity demanded, and how raising a tax on a good affects the revenue from the tax.

B  how a change in quantity demanded affects price and how a change in quantity supplied affects price.

C  the burden of taxes on consumers.

A  horizontal.

B  upward sloping to the right.

C  vertical.

A  relatively responsive

B  relatively unresponsive

C  the same

A  elastic, greater than 1

B  inelastic, less than 1

C  unitary, equal to 1