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Ec260 Exam Testbank With Complete Solutions Latest Update 2024
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Ec260 Exam Testbank With Complete Solutions Latest Update 2024
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Ec260 Exam Testbank With Complete SolutionsLatest Update 2024
3) If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls
from 10,000 slices to 7,400 slices, calculate the arc price elasticity.
A) -1.92
B) -1.64
C) -4
D) -2 - ANS B
4) If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls
from 10,000 slices to 7,400 slices, using the formula for arc price elasticity, what is
the percentage change in price?
A) 18.18%
B) 29.89%
C) 20%
D) 16.67% - ANS A
8) If the demand curve is given by Q = a + bp, then b is
A) positive.
B) the quantity demanded when price is zero.
C) the change in quantity demanded if price changes by 1.
D) different at different points on the demand curve. - ANS C
,9) If the demand curve for slices of pizza is given as Q = 300 - 16p, then the point
elasticity of demand when price is $1.50 is
A) -24.
B) -16.
C) -0.0054.
D) -0.087. - ANS D
11) Suppose the demand function for a good is expressed as Q = 100 - 4p. If the
good currently sells for $10, then the point price elasticity of demand equals
A) -1.5.
B) -0.67.
C) -4.
D) -2.5. - ANS B
12) If the price of orange juice rises 10%, and as a result the quantity demanded
falls by 8%, the price elasticity of demand for orange juice is
A) -1.25.
B) -80.0.
C) -0.80.
D) -10.0. - ANS C
,13) The market demand for wheat is Q = 100 - 2p + 1pb, where pb is the price of
barley. If the price of wheat is $2, the price elasticity of demand
A) equals (-4/46).
B) equals (-46).
C) equals (-1).
D) cannot be calculated without more information. - ANS D
18) If the demand function for orange juice is expressed as Q = 2000 - 500p, where
Q is quantity in gallons and p is price per gallon measured in dollars, then the
demand for orange juice has a unitary elasticity when price equals
A) $0.
B) $1.
C) $2.
D) $4. - ANS C
19) If the demand for orange juice is expressed as Q = 2000 - 500p, where Q is
measured in gallons and p is measured in dollars, then at the price of $3, the
demand curve
A) is elastic.
B) has a unitary elasticity.
C) is inelastic.
D) is perfectly inelastic. - ANS A
, 24) If the price elasticity of demand for a good is less than one in absolute value,
economists would characterize consumers of this good
A) as not very sensitive to price.
B) as not very sensitive to the quantity they demand.
C) as very sensitive to price.
D) as elastic. - ANS A
31) If demand is inelastic,
A) then a 1% increase in price leads to a fall in quantity of greater than 1%.
B) then a 1% increase in price leads to a fall in quantity of less than 1%.
C) then a 1% increase in price leads to a fall in quantity of 1%.
D) then a 1% increase in price leads to a rise in quantity of less than 1%. - ANS B
32) If demand is elastic,
A) then a 1% decrease in price leads to a rise in quantity of greater than 1%.
B) then a 1% decrease in price leads to a rise in quantity of less than 1%.
C) then a 1% decrease in prices leads to a rise in quantity of 1%.
D) then a 1% decrease in price leads to a fall in quantity greater than 1%. - ANS A
33) If demand is perfectly elastic,
A) then a 1% increase in price leads to a fall in quantity of greater than 1%.
B) then a 1% increase in price leads to a fall in quantity of less than 1%.
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