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Consider the segment of a demand curve along which all price elasticities of demand are

Consider the segment of a demand curve along which all price elasticities of demand are
                            less than 1. A decrease in price anywhere along that segment

a.shifts that segment of the demand curve to the right

b.increases total revenue

c.decreases total revenue

d.shifts that segment of the demand curve to the left

e.raises the price elasticity of demand

82.              The bus company in Detroit found that when it reduced its price in order to get more
                            people to use the bus—and more people did—the bus company’s total revenue still
                            remained the same. Why did they get this surprising result?

a.The demand curve was horizontal, reflecting a price elasticity of zero.

b.The demand curve was vertical, reflecting a price elasticity of zero.

c.The demand curve shifted to the right.

d.The price elasticity within the range of price-before-the-cut and price-after-the-cut
was unit elastic.

e.The price cut was insufficient. A deeper cut would have increased total revenue.

83.              It is Valentine’s Day and Fred is desperately searching all over town for a dozen roses to
                            give to Diane. “I’ll pay anything for a dozen roses,” he says. Whether he really means it
                            or not, the statement implies that his price elasticity of demand for roses is

a.infinite

b.negative

c.one

d.greater than one

e.zero

84.              The long-run price elasticity of demand for a good is usually larger than its short-run
                            price elasticity because

a.as the saying goes, “out of sight, out of mind”

b.more goods are demanded in the long run than in the short run

c.people have more time to find substitute goods

d.incomes tend to rise over time

e.supply curves shift outward over time

85.              The best guess is that the cross elasticity between Rolaids and Tums, the two leading
                            antacids in the country, is

a.negative

b.positive

c.zero

d.one

e.infinite

86.              You would expect the cross elasticity between tennis racquets and tennis balls to be

a.negative

b.positive

c.zero

d.one

e.infinite

87.              If the cross elasticity between two goods, X and Y, is positive, then we know they are

a.substitute goods

b.complementary goods

c.unrelated goods

d.inferior goods

e.normal goods

88.              Suppose we have two pairs of substitute goods. The first are very close substitutes, such
                            as Coke and Pepsi, while the others are less close, such as Coke and iced tea. We would
                            expect the cross elasticity of the closer pair to be

a.positive while the less close pair to be negative

b.negative while the less close pair to be positive

c.one while the less close pair to be zero

d.the smaller of the two

e.the larger of the two

89.              When the price of bread increases by 3 percent, the quantity demanded of crackers
                            increases by 2 percent. The cross elasticity of demand between crackers and bread is

a.0.67

b.1.5

c.2.5

d.3.2

e.5.0

90.              Which of the following pairs best represents substitute goods?

a.hamburgers and hamburger rolls

b.hot dogs and hot dog rolls

c.veggie burgers and hamburger rolls

d.hot dogs and hamburger rolls

e.hamburgers and hot dogs

Dec 10 2019 Read more Less More

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