Reference no: EM13244480

1) Price elasticity of demand is computer as the arc elasticityby:
a) dividing the slope of the demand curve by the average value ofeach variable between two points
b) dividing the slope of the demand curve by the average value ofeach variable at one point
c) calculating percentage changes relative to the value of onevariable at one point
d) calculating percentage changes relative to the average value ofeach variable between two points

2) If the price of chocolate-covered peanuts decreases from $1.10to $0.90 and the quantity demanded increases from 190 bags to 210bags, this indicates that, if other things are unchanged, the priceelasticity of demand is:
a) 0
b) -0.5
c) -1
d) -2

3) Suppose the price elasticity of demand for oranges is -1.8. If afall frost destroys one-third of the nations orange crop, how willthat affect total expenditures on oranges, all other thingsunchanged?
a) total expenditures will rise
b) total expenditures will fall
c) total expenditures will remain unchanged
d) not enough information is given to answer the question

4) The price elasticity of demand for cabbage has been estimated tobe -0.25. If an insect infestation destroys 20percent of thenation's cabbage crop, how will that affect total expenditures oncabbage, all other things unchanged?
a) total expenditures will rise
b) total expenditures will fall
c) total expenditures will remain unchanged
d) not enough information is given to answer the question

5) The price of elasticity of demand for ground beef has beenestimated to be -1.0. If mad cow disease strikes the United Statesand a large percentage of the cattle are removed from the market,how will that affect total expenditures on hamburger, all otherthings unchanged?
a)total expenditures will remain unchanged
b) total expenditures will fall by more than 1percent
c) demanded will fall by 1percent, but total expenditures will fallby less than 1percent
d) total expenditures will rise

6) The price elasticity of demand for fresh tomatoes has beenestimated to be -2.22. If a new insecticide and fertilizertreatment yields a 20percent increase in the nation's fresh tomatocrop, how will that affect total expenditures on fresh tomatoes,all other things unchanged?
a) total expenditures will remain unchanged
b) total expenditures will fall
c) total expenditures will rise
d0 not enough information is given to answer the question

7) The price elasticity of demand for milk has been estimated to besomewhere between -0.49 and -0.63. If a new system of feeding andmilking cows yields a 15percent increase in the production of milkthroughout the country, how will that affect total expenditures onmilk, all other things unchanged?
a) total expenditures will remain unchanged
b) total expenditures will fall
c) total expenditures will rise
d) not enough information is given to answer the question

8)If the price elasticity of demand is found to be -3/4, thendemand is:
a) price inelastic
b) price elastic
c) unit price elastic
d) positively sloped

9) If the price elasticity of demand is found to be-6, then demandis:
a) price inelastic
b) price elastic
c) unit price elastic
d) horizontal

10) If the price of a good is increased by 15percent and thequantity demanded falls by 20percent, the price elasticity ofdemand is:
a) price elastic
b) price inelastic
c) unit price elastic
d) normal

11) If the absolute value of price elasticity is greater than 1,this means the demand curve in that region is:
a) price elastic
b0 price inelastic
c) unit price elastic
d) upward sloping