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Ekonomiks Daniels
Professor Daniels Eco II Review
| Question | Answer |
|---|---|
| The ratio of the percentage change in a dependent variable to the percentage change in an independent variable, all other things unchanged, is: | Elasticity |
| Elasticity is: | The ratio of the percentage change in a dependent variable to the percentage change in an independent variable. |
| The ratio percentage change in the quantity demanded to the-percentage change in price, all other things unchanged, is: | price elasticity of demand |
| Price elasticity of demand measures the responsiveness of the change in: | quantity demanded to a change in price. |
| The price elasticity of demand is measured by: | dividing the percentage in quantity demanded by the percentage change in price |
| The price elasticity of demand is: | usually equal to 1 |
| When prices goes down, the quantity demanded goes up. Price elasticity measures: | how responsive the quantity change is in relation to the price change |
| Suppose at a price of $10 the quantity demanded is 100. When price falls to $8, the quantity demanded increases to 130. The price elasticity of demand between the prices of $10 and $8 is approximately: | -1.17 |
| The price elasticity of demand can be found by: | examining the relative percentage change in quantity demanded goes in the opposite direction |
| If the price of a good is increased by 15 percent and the quantity demanded changes by 20 percent, then the price elasticity of demand is equal to: | approximately -1.33 |
| Using the method of arc elasticity to calculate price elasticity of demand eliminates the problem of: | different elasticities, depending on whether price decreases or increases |
| A men's tie store sold an average of 30 ties per day when the price was $5 per tie, but sold 50 of the same ties per day when the price was $3 per tie. Hence, the absolute value of the price elasticity of demand is: | equal to 1 |
| A shire manufacturer sold 10 dozen shirts per day when the price was $4 per shirt but sold 15 dozen shirts per day when the price was $3 per shirt. Hence, the absolute value of the price elasticity of demand is: | greater than 1 but less than 3 |
| The concept of elasticity is most closely related to: | the law of demand |
| The concept of elasticity is most closely related to: | a movement along the demand curve |
| Calculating percentage changes relative to the average value of each variable between two points is: | arc elasticity |
| Price elasticity of demand is computed as the arc elasticity by: | calculating percentage changes relative to the average value of each variable between two points |
| If the price of chocolate-covered peanuts decreases from $1.10 to $.90 and the quantity demanded increases from 190 bags to 210 bags, this indicates that, if other things are unchanged, the price elasticity of demand is: | -.5 |
| If the price of chocolate-covered peanuts decreases from $1.10 to $.90 and the quantity demanded increases from 180 bags to 220 bags, this indicates that, if other things are unchanged, the price elasticity of demand is: | -1 |
| If the price of chocolate-covered peanuts decreased from $1.05 to $.95 and the quantity demanded increases from 180 bags to 220 bags, this indicates that, if others things are unchanged, the price elasticity of demand is: | -2 |
| If the price of chocolate-covered peanuts decreases from $1.10 to $.90 and the quantity demanded does not change, this indicates that, if other things are unchanged, the price elasticity of demand is: | 0 |
| If the price of chocolate-covered peanuts decreases from $1.10 to $.90 and the quantity demanded increases from 0 bags to 400 bags, this indicates that, if other things are unchanged, the price elasticity of demand is: | greater that 2 (absolute value) |
| The price elasticity of a demand curve with a constant slope: | increases in absolute value as the price rises |
| The price elasticity of a demand curve with a constant slope | decreases in absolute value as quantity demanded rises. |
| Suppose the demand curve has a slope equal to negative 1. The price elasticity of demand at any point on this demand curve is: | not described by any above: infinite,equal to zero, greater than 1, but less than infinite |
| The price elasticity of demand is calculated for: | small changes in price |
| A linear demand curve will have absolute values of the coefficient of price elasticity that | range from less than 1 to greater than 1 |
| A Linear Demand Curve | can have both elastic and inelastic price elasticity of demand |
| Along the upper half of a linear demand curve, the price elasticity of demand will be | price elastic |
| Along the upper half of a linear demand curve, the price elasticity of demand will be | price inelastic |
| A linear demand curve will have which of the following properties? | a slope that is constant and price elasticity that varies |
| An upward movement along a linear demand curve from lower prices to higher prices will result in: | increasing price elasticity |
| Assuming a linear demand curve, lower prices would result in: | less price elastic demand |
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