A bakery would be willing to supply 500 bagels per day at a price of $0.50 each. At a price of $0.70, the bakery would be willing to supply 900. Using the midpoint method, what is the elasticity of supply for bagels?

Select one:

a.0.58

b.0.77

c.1.24

d.1.71

what does the tax incidence depend on?

Select one:

a.the forces of supply and demand

b.the size of the market

c.whether the entire tax is levied on the buyers or the sellers

d.the government regulations

What is the difference between slope and elasticity?

Select one:

a.Slope measures percentage changes, and elasticity measures actual changes.

b.Slope and elasticity both measure actual changes.

c.Slope measures actual changes, and elasticity measures percentage changes.

d.Slope and elasticity both measure percentage changes.

When demand is elastic, what is the price elasticity, and how do price and total revenue behave?

Select one:

a.less than 1, and price and total revenue will move in the same direction

b.greater than 1, and price and total revenue will move in opposite directions

c.less than 1, and price and total revenue will move in opposite directions

d.greater than 1, and price and total revenue will move in the same direction

What does a binding price floor cause?

Select one:

a.excess demand

b.a surplus

c.a drop in the equilibrium price

d.a shortage

What is one disadvantage of government subsidies over price controls?

Select one:

a.Subsidies require higher taxes.

b.Subsidies cause lower prices to suppliers.

c.Subsidies cause disequilibrium in the market in which they are imposed.

d.Subsidies cause unemployment.

Moving up a linear demand curve, what happens to total revenue?

Select one:

a.It increases, then decreases.

b.It decreases.

c.It decreases, then increases.

d.It increases.

A price floor is binding when it is

Select one:

a.lower than the equilibrium market price.

b.equal to the equilibrium market price.

c.set by the government.

d.higher than the equilibrium market price.

If sellers respond substantially to changes in price,

Select one:

a.the supply curve will shift substantially when the price rises.

b.the sellers are considered to be relatively price sensitive.

c.the price elasticity of supply equals 1.

d.the sellers are considered to be relatively price insensitive.

What is the main reason for using the midpoint method?

Select one:

a.It gives the same answer regardless of the direction of change.

b.It rounds quantities to the nearest whole unit.

c.It uses fewer numbers.

d.It rounds prices to the nearest dollar.

What effect does a tax on buyers of coffee have on the equilibrium price (for buyers) and quantity?

Select one:

a.It reduces the equilibrium price of coffee and reduces the equilibrium quantity.

b.It increases the equilibrium price of coffee and reduces the equilibrium quantity.

c.It increases the equilibrium price of coffee and increases the equilibrium quantity.

d.It reduces the equilibrium price of coffee and increases the equilibrium quantity.

If a good is a necessity, demand for the good would tend to be

Select one:

a.unit elastic.

b.elastic.

c.horizontal.

d.inelastic.

When is demand said to be unit elastic?

Select one:

a.when the quantity demanded changes by a larger percentage than the price

b.when the quantity demanded changes by a smaller percentage than the price

c.when the quantity demanded changes by the same percentage as the price

d.when the quantity demanded does not respond to a change in price

What happens as elasticity of supply rises?

Select one:

a.The supply curve gets flatter.

b.The quantity supplied falls.

c.The supply curve gets steeper.

d.The quantity supplied increases.

When a tax is placed on the buyer of a product, what is the result?

Select one:

a.Buyers pay more, and sellers receive less.

b.Buyers pay less, and sellers receive less.

c.Buyers pay more, and sellers receive more.

d.Buyers pay less, and sellers receive more.

If a 5% increase in price causes a 15% decrease in quantity demanded, what might be said about this product?

Select one:

a.It might be part of a broadly defined market.

b.It has no close substitute.

c.It might be a luxury.

d.It might be in a short time horizon.

There are very few, if any, good substitutes for motor oil. What does this imply?

Select one:

a.The demand for motor oil would tend to be price inelastic.

b.The demand for motor oil would tend to be income elastic.

c.The demand for motor oil would tend to be price elastic.

d.The supply of motor oil would tend to be price elastic.