Chapter 5 Elasticity and its Its Application
TRUE OR FALSE
1. The demand for bread is likely to be more elastic than the demand for solid-gold bread plates. (F)
2. In general, demand curves for luxuries tend to be price elastic. (T)
3. Goods with clo substitutes tend to have more elastic demands than do goods without clo substitutes. (T)
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4. The demand for gasoline will respond more to a change in price over a period of five weeks than over a period of five years. (F)
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5. The price elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in price. (T)
6. Demand is inelastic if the price elasticity of demand is greater than 1. (F)
伟大的长征7. Price elasticity of demand along a linear, downward-sloping demand curve increas as price falls. (F)
8. If the price elasticity of demand is equal to 1, then demand is unit elastic. (T)
9. When demand is inelastic, a decrea in price increas total revenue. (F)
10. The income elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in income. (T)
11. Normal goods have negative income elasticities of demand, while inferior goods have positive income elasticities of demand. (F)
12. If the cross-price elasticity of demand for two goods is negative, then the two goods are substitutes. (T)
13. If the cross-price elasticity of demand for two goods is negative, then the two goods are complements. (T)
14. Price elasticity of supply measures how much the quantity supplied responds to changes in the price. (T)
15. Supply and demand both tend to be more elastic in the long run and more inelastic in the short run. (T)
16. If the price elasticity of supply is 2 and the quantity supplied decreas by 6%, then the price must have decread by 3%. (T)
17. If a supply curve is horizontal, then supply is said to be perfectly elastic, and the price elasticity of supply approaches infinity. (T)
18. A government program that reduces land under cultivation hurts farmers but helps consumers. (F)
19. OPEC failed to maintain a high price of oil in the long run, partly becau both the supply of oil and the demand for oil are more elastic in the long run than in the short run. (T)
20. Drug interdiction, which reduces the supply of drugs, may decrea drug-related crime becau the demand for drugs is inelastic. (F)
才艺表演有哪些Short Answer
1. Using the midpoint method, compute the elasticity of demand between points A and B. Is demand along this portion of the curve elastic or inelastic? Interpret your answer with regard to price and quantity demanded. Now compute the elasticity of demand between points B and C. Is demand along this portion of the curve elastic or inelastic?
In the ction of the demand curve from A to B, the elasticity of demand would be 2.5. This would be an elastic portion of the curve. This would mean that for every 1 percent change in price, quantity demanded would change by 2.5 percent.
In the ction of the demand curve from B to C, the elasticity of demand would be .75. This would be an inelastic portion of the curve. This would mean that for every 1 percent change in price, quantity demanded would change by 0.75 percent.
CHOICE
1. In general, elasticity is a measure of (d)
网易笔试a. | 共饮长江水the extent to which advances in technology are adopted by producers. | 可爱蛋糕
b. | the extent to which a market is competitive. |
c. | how firms’ profits respond to changes in market prices. |
d. | how much buyers and llers respond to changes in market conditions. |
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2. When studying how some event or policy affects a market, elasticity provides information on the (b)
a. | equity effects on the market by identifying the winners and lors. |
b. | magnitude of the effect on the market.退烧偏方 |
c. | speed of adjustment of the market in respon to the event or policy. |
d. | number of market participants who are directly affected by the event or policy. |
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3. Which of the following statements about the price elasticity of demand is correct? (d)
a. | The price elasticity of demand for a good measures the willingness of buyers of the good to buy less of the good as its price increas. |
b. | Price elasticity of demand reflects the many economic, psychological, and social forces that shape consumer tastes. |
c. | Other things equal, if good x has clo substitutes and good y does not have clo substitutes, then the demand for good x will be more elastic than the demand for good y. |
d. | All of the above are correct. |
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4. For a good that is a necessity, (b)
