WRITE THE LETTER OF THE BEST ANSWER IN THE SPACE PROVIDED.

____1. Another word for elasticity is

a.profit. c.bonus.

b.surplus. d.responsiveness.

2. You are given the following segment of a demand schedule to use in answering

this question about the price elasticity of demand for a dozen eggs:

Quantity Price

100 $ 2.00

90 2.50

If the price of a dozen eggs increases from $2.00 to $2.50 and the quantity demanded

decreases from 100 dozen to 90 dozen, then according to the midpoints formula,

what is the coefficient of price elasticity of demand for a dozen eggs?

Answer: _______

____3. Demand is elastic if

a. the value of price elasticity is less than 1.

1. the percentage change in price is greater than the percentage change in

quantity demanded.

c. the percentage change in price is equal to the percentage change in quantity

demanded.

d. the percentage change in quantity demanded is greater than the percentage

change in price.

____4. Demand is said to be inelastic whenever

a.price elasticity has an absolute value of 1.

b.price elasticity has an absolute value less than 1.

c.price elasticity has an absolute value greater than 1.

d.price elasticity is negative.

____5. Which of the following elasticity coefficients is most elastic?

a.-0.1 b. -1.0 c. -2.0 d. -1.3

____6. If the price of a product increases by 5% and as a result the quantity demanded decreases by 5%, the product is

a.relatively elastic. c. perfectly elastic.

b.relatively inelastic. d. unit elastic.

____7.For which of the following products is the consumer's demand curve most likely

tobe vertical because the product is perfectly inelastic?

a.Cars for high school students

b.An ipod for a music lover

c.Kidney dialysis treatment for a person with kidney disease

d.Lobster for a seafood lover.

____8.If people are given more time to adjust to a price change, the price elasticity of

demand for that good is likely to

a.become more elastic.b.become very inelastic.c. fall to zero.

____9. Generally, the price elasticity of demand for a product with few or no substitutes

tends to be

a. elastic. b.inelastic. c. unitary elastic.

____10. Based on the determinants of elasticity, which of the following goods

is more inelastic than the others listed?

a. a loaf of bread c.a new Cadillac

b. a restaurant meal d.a diamond bracelet

____11. If supply is perfectly inelastic, the supply curve is

a.vertical. b.horizontal.c.almost horizontal.

____12. The greater the amount of time that producers have to adjust to a change in

demand,

a.the less elastic is the supply elasticity.

b.the more elastic is the supply elasticity.

____13. For which of the following does the income elasticity of demand have a

negative value?

a.A filet mignon steak dinner at the Capitol Grill Restaurant

b.Used clothing from the Salvation Army Thrift Store

c.Tickets to a Major League baseball game at Yankee Stadium

d.All of them

____14. The value of cross-price elasticity of demand between Honda Accords and Toyota Camrys is

like to be which one of the following?

a.+4.5 b. -4.0 c.0.

____15. Cross-price elasticity of demand measures

a.elasticityof supply at the intersection of supply and demand curves.

b.the relative elasticity of supply and demand at the intersection of the two curves.

c.the relationship between the price of one good and the demand for a related good.

d.elasticity of demand at the intersection of the supply and demand curves.