Reference no: EM133248535
1. An increase in per capita income will cause the demand curve for lobster to
stay the same, but the quantity of lobster demanded will increase.
shift to the left, if lobster is a normal good.
shift to the right, if lobster is a normal good.
shift to the right, if lobster is an inferior good.
stay the same, but the quantity of lobster demanded will decrease.
2. A reduction in the demand for steak would lead to
an increase in the price of steak and in the quantity of steak supplied.
a reduction in the price of steak and in the supply of steak.
an increase in the demand for complements such as steak sauce and onion rings.
a reduction in the price of steak and in the quantity of steak supplied.
an increase in the price of steak and in the supply of steak.
3. The income elasticity of demand for television sets is 1.6. This means that:
an increase in income of 10% will cause the quantity of television sets demanded to rise by 16%
an increase in income of 10% will cause the quantity of television sets demanded to fall by 16%
a fall of 10% in the price of television sets will cause income to fall by 16%
a fall of 10% in the price of television sets will cause income to rise by 16%
4. If A and B are consumption complements, a fall in the price of A is likely to cause:
the demand curve for B to shift to the right
the demand curve for A to shift to the right
the demand curve for A to shift to the left
the demand curve for B to shift to the left
5. Which of the following statements is correct?
A change in demand implies a shift of the demand curve but no change in quantity demanded at any given price
A change in demand implies a shift of the demand curve and a change in quantity demanded
A change in quantity demanded implies a change in demand and a shift of the entire demand curve
A change in quantity demanded implies a change in demand and a movement along a given demand curve
6. If the coefficient of the price elasticity of demand is 2, this means that:
a 5% fall in price will result in a 10% increase in quantity demanded
a 5% fall in price will lead to a 2.5% increase in quantity demanded
a 5% rise in income will lead to a 2.5% fall in quantity demanded
a 5% increase in income will lead to a 10% increase in quantity demanded
7. Which of the following will not cause the demand curve to shift?
A change in the price of a complement
A change in the price of a substitute
A change in income
A change in the price of the product
8. Refer to the above Figure. The elasticity of demand from point A to point B, using the midpoint method would be
-1.5
-2.5
-2
-1
9. Refer to the above Figure. At a price of P1:
D2 is more elastic than D1
D1 is more elastic than D
D2 is more elastic than D
D is more elastic than D1
10. What effect will an increase in the price of grapes have in the market for wine?
Increase demand
Increase supply
Decrease supply
Decrease demand
11. Refer to data above. If the price falls to $4, then total revenue will:
increase to $840
fall to $300
fall to $280
increase to $560
12. Refer to the following situation for the questions below. The coefficient of the price elasticity of demand for a good is 2. The price is now $5, and the quantity demanded at that price is 100. Refer to data above. If the price rises to $6, then total revenue will change to:
$360
$500
$600
$300
13. If the cross-price elasticity of demand between A and B is 0.65, then we know that:
A and B are complements
A and B are substitutes
the demand for B is inelastic
the demand for A is elastic
14.. If the supply of apartments is increasing more rapidly than the demand, the likely result will be
lower apartment rents.
higher apartment rents.
an increase in the demand for single-family homes, a substitute for apartments.
higher apartment rents and an increase in the demand for apartments and mobile homes.
an increase in the demand for mobile homes.
15. An increase in income from $7500 to $9000 causes an increase in purchase of a good from 3000 to 3500 units. The mid-point income elasticity of demand for that good must therefore be:
0.83
0.61
3.60
1.20
16. A perfectly inelastic demand curve is likely to exist for which of the following items?
fresh produce
beef
prescription drugs
beer