1.As the price of flour increases, firms that produce cookies will ______.

Select one:

a.leave their production unchanged

b.increase the supply of cookies.

c.decrease the supply of cookies

d.increase the quantity of cookies supplied

2.If the demand for a good increases as consumers' income rise, the good is termed a(n) ______.

Select one:

a.substitute good

b.normal good

c.inferior good

d.complement good

3.A market is comprised of ______.

Select one:

a.just suppliers

b.both suppliers and demanders

c.workers

d.just demanders

4.The price elasticity of demand measures ______.

Select one:

a.the responsiveness of the quantity demanded to changes in price

b.how often the price of a good changes

c.how sensitive the quantity demanded is to changes in demand

d.the slope of a budget curve

5.When the quantity of coal supplied is measured in kilograms instead of pounds, the demand for coal becomes ______.

Select one:

a.undefined

b.less elastic

c.more elastic

d.neither more nor less elastic

6.

Price (RM per bushel) Quantity demanded (bushels)

A 10 0

B 8 4

C 6 8

D 4 12

E 2 16

Figure 1: Demand for Peas

Figure 1 above gives the demand schedule for Peas. As you move from point A to point B, the price elasticity of demand equals ______.

Select one:

a.0.50

b.9.09

c.0.11

d.0.22

7.Demand is income elastic if ______.

Select one:

a.an increase in income will not affect the quantity demanded

b.the good in question has close substitutes

c.a large percentage increase in income will result in a small percentage increase in quantity demanded

d.a small percentage increase in income will result in a large percentage increase in quantity demanded

8.

Price (RM per bushel) Quantity demanded (bushels)

8 2,000

7 4,000

6 6,000

5 8,000

4 10,000

3 12,000

Figure 2: Demand for Snow Peas

Figure 2 above gives the demand schedule for Snow Peas. The price elasticity of demand between RM6.00 and RM7.00 per bushel is ______.

Select one:

a.2.0

b.5.0

c.2.6

d.1.0

9.Unit elastic demand ______.

Select one:

a.will be horizontal

b.means that the ratio of a change in the quantity demanded to a change in the price equals 1

c.will be vertical

d.means that the ratio of a percentage change in the quantity demanded to a percentage change in the price equals 1

10.Supply is elastic if ______.

Select one:

a.a 1 percent change in price causes a larger percentage change in quantity supplied

b.the good in question is a normal good

c.the slope of the supply curve is positive

d.a 1 percent change in price causes a smaller percentage change in quantity supplied