Transcript Ch5
Click Clickon onthe thebutton buttontotogo gototothe theQuestion problem © 2013 Pearson Elasticities of Demand and Supply 5 CLICKER QUESTIONS © 2013 Pearson Click Clickon onthe thebutton buttontotogo gototothe theQuestion problem Checkpoint 5.1 Checkpoint 5.2 Checkpoint 5.3 Question 1 Question 4 Question 7 Question 2 Question 5 Question 8 Question 3 Question 6 Question 9 Question 10 © 2013 Pearson CHECKPOINT 5.1 Question 1 The demand for a good is elastic if A. consumers respond strongly to changes in the price of the good. B. a large percentage change in price brings about a small percentage change in quantity demanded. C. a small percentage change in price brings about a small percentage change in quantity demanded. D. the quantity demanded is not responsive to price changes. E. a change in the quantity demanded brings a small change in the price of the good. © 2013 Pearson CHECKPOINT 5.1 Question 2 The price of a bag of pretzels rises from $2 to $3, and the quantity demanded decreases from 100 bags to 60 bags. The price elasticity of demand for pretzels is ________. A. 1.0 B. 1.25 C. 40.0 D. 20.0 E. 0.80 © 2013 Pearson CHECKPOINT 5.1 Question 3 When a firm raises the price of its product, the firm’s total revenue _________. A. B. C. D. E. decreases if demand for its product is unit elastic increases if demand for its product is unit elastic decreases if demand for its product is inelastic increases if demand for its product is elastic decreases if demand for its product is elastic © 2013 Pearson CHECKPOINT 5.2 Question 4 If, when the price of a good rises by 10 percent, the quantity supplied of the good increases by 5 percent, then the elasticity of supply ________. A. B. C. D. E. exceeds 1, and the supply of the good is elastic is negative, and the supply of the good is inelastic is less than 1, and the supply of the good is elastic is less than 1, and the supply of the good is inelastic exceeds 1 and the supply of the good is inelastic © 2013 Pearson CHECKPOINT 5.2 Question 5 The greater the amount of time that passes after the price of a good changed, the ___________ of that good becomes. A. B. C. D. E. less elastic the supply more elastic the supply more negative the supply steeper the supply curve more inelastic the supply © 2013 Pearson CHECKPOINT 5.2 Question 6 The supply of beachfront property on St. Simon’s Island is ________. A. B. C. D. E. elastic unit elastic negative inelastic perfectly elastic © 2013 Pearson CHECKPOINT 5.3 Question 7 To determine whether two goods are complements or substitutes, economists use the _______. A. B. C. D. E. price elasticity of supply cross elasticity of demand price elasticity of demand income elasticity of demand substitute elasticity of demand © 2013 Pearson CHECKPOINT 5.3 Question 8 The income elasticity of demand for used cars is less than zero. So, used cars are _____. A. B. C. D. E. a good with an inelastic demand a normal good an inferior good a perfectly inelastic good substitute goods © 2013 Pearson CHECKPOINT 5.3 Question 9 When income increases by 6 percent, the demand for potatoes decreases by 2 percent. The income elasticity of demand for potatoes equals _____. A. 2.00 B. 3.00 C. 3.00 D. 0.33 E. 0.33 © 2013 Pearson CHECKPOINT 5.3 Question 10 If two goods have a cross elasticity of demand of 2, then when the price of one good increases, the demand for the other good _________, and the two goods are ______. A. B. C. D. E. increases; complements decreases; complements remains unchanged; complements might increase or decrease; substitutes decreases; substitutes © 2013 Pearson