1. In economics, elasticity refers to the responsiveness of one variable to changes in

1. income only
2. the same variable
3. another variable
4. price only

1. If the percentage change in quantity demanded divided by the percentage change in price is less than one, we must have

1. elastic supply
2. inelastic demand
3. inelastic supply
4. elastic demand

3. A precisely 15-percent change in quantity demanded results from a precisely 15-percent change in price. In this case, the price elasticity of demand is _____.

1. inelastic

1. elastic

1. unitary

1. unknown in terms of elasticity

4. Say quantity supplied increases 20 percent after a 5 percent increase in price. In this case, we know that _____.

1. demand is elastic
2. supply is elastic
3. supply is inelastic
4. demand is inelastic

5. The midpoint formula for calculating elasticity uses the same base, average quantity and average price, meaning the end result will be

1. larger for a price decrease.
2. different depending on whether there is a price increase or decrease.
3. larger for a price increase.
4. the same regardless of whether there is a price increase or decrease.

6. Which of the following elasticities could be the result of the midpoint method on an inelastic part of the demand curve?

1. 1.95
2. 1.00
3. 4.45
4. 0.45

7. A 7.9% change in price results in a 26.5% change in quantity supplied. As a result, the price elasticity of supply is _____.

1. 3.35
2. 7.9
3. 26.5
4. 0.29

8. Infinite (or perfect) elasticity of demand could be demonstrated graphically with a

1. horizontal demand curve.
2. upward sloping straight line representing demand.
3. downward sloping curved arc representing demand.
4. vertical demand curve.

9. Because substitutes in consumption can take a long time to find,

1. elasticity of demand is often lower in the short run.
2. elasticity of demand is often higher in the short run.
3. elasticity of supply is often higher in the short run.
4. elasticity of demand always equals elasticity of supply in the short run.

10. The cross price elasticity of demand for related goods A and B is calculated to be -3.0. Without needing any more information, we know that goods A and B are _____.

1. substitutes
2. normal
3. complements
4. inferior

11. Intermediate goods, which go into producing other goods, are

1. included in GDP calculations to balance out illegal goods.
2. excluded from GDP calculations to avoid double counting.
3. included in GDP calculations to ensure correct totaling.
4. never a part of the production process.

12. The demand measure of GDP accounting adds together

1. consumption, investment, government spending on goods and services, and spending on imports only
2. consumption, investment, government spending on goods and services, and spending on net exports
3. consumption, investment, government spending on goods and services, and interest
4. consumption, profit, government spending on goods and services, and spending on net exports

13. Which of the following is not counted as a part of GDP?

1. the unsold additions to inventory at a pet food shop
2. the purchase of 200 shares of Nike stock by an investor
3. the purchase of a street sweeper vehicle by the city of San Francisco
4. the purchase of a load of mulch by a consumer

14. Based on our textbook Table 6.5 Links to an external site., the nominal GDP in the United States in 2000 was about _____.

1. 13,095 billion dollars
2. 4,347 billion dollars
3. 10,290 billion dollars
4. 14,958 billion dollars

15. To compare the GDP of two different countries with different currencies, it is necessary to use

1. per capita GDP
2. bitcoin
3. the barter system
4. an exchange rate

16. Gross Domestic Product equals $980 billion. If consumption equals $610 billion, investment equals $120 billion, and government spending equals $260 billion, then

1. exports exceed imports by $100 billion
2. imports exceed exports by $100 billion
3. exports exceed imports by $10 billion
4. imports exceed exports by $10 billion

17. Peru has a GDP of 733,000 billion Peruvian soles, and a population of 33 million. The exchange rate is 3.6 Peruvian soles per U.S. dollar. The GDP per capita of Peru as measured in U.S. dollars is approximately.

1. $6,535.71
2. $22,212.12
3. $6,170.03
4. $203,333.33

18. Investment (I) tends to

1. include only government expenditure (G).
2. be precisely equal to the trade balance (X - M).
3. stay relatively constant over time, compared to consumption (C), which is volatile.
4. fluctuate more noticeably than consumption (c)

19. Ethiopia has a GDP of $9 billion (measured in U.S. dollars) and a population of 51 million. Costa Rica has a GDP of $10 billion (measured in U.S. dollars) and a population of 5 million. Calculate per capita GDP for each country.

1. Ethiopia = $1,764.71; Costa Rica = $200,000.00
2. Ethiopia = $176.47; Costa Rica = $2,000.00
3. Ethiopia = $17.65; Costa Rica = $2,000.00
4. Ethiopia = $17.65; Costa Rica = $200.00

20. The real value of any economic statistic refers to the statistic after it has been adjusted for inflation, while the _____ refers to the number that is actually announced at that time.

1. infinite value
2. nominal value
3. adjusted value
4. net value