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# If New York City expects that an increase in bus fares will raise mass transit revenues,

If New York City expects that an increase in bus fares will raise mass transit revenues, it
must think that the demand for bus travel is

a. elastic

b. unit elastic

c. inelastic

d. perfectly inelastic

e. 10

162.              Which of the following describes a situation in which demand must be inelastic?

a. Total revenue decreases by 10 percent when the price of spats rises by 10 percent.

b. Total revenue decreases by less than 10 percent when the price of spats rises by 10
percent.

c. Total revenue increases by more than 10 percent when the price of spats rises by
10 percent.

d. Total revenue decreases by \$10 when the price of spats rises by \$10.

e. Total revenue decreases by more than \$10 when the price of spats rises by \$10.

163.              Which of the following describes a situation in which demand must be elastic?

a. Total revenue increases by 15 percent when the price of corn dogs rises by 15
percent.

b. Total revenue increases by less than 15 percent when the price of corn dogs rises by
15 percent.

c. Total revenue decreases by more than 15 percent when the price of corn dogs rises
by 15 percent.

d. Total revenue increases by \$15 when the price of corn dogs rises by \$15.

e. Total revenue increases by more than \$15 when the price of corn dogs rises by \$15.

164.              The demand for most agricultural products tends to be

a. both price and income elastic

b. both price and income inelastic

c. price inelastic and income elastic

d. price elastic and income inelastic

e. of unitary price elasticity and income elastic

165.              A measure of sensitivity or responsiveness to changes in price or income is called

a. elasticity

b. technology

c. supply and demand

d. social pressure

e. kickback

166.              Elasticity is a measure of

a. the slope of a linear demand curve

b. the slope of a supply curve

c. relative responsiveness

d. economic welfare

e. consumer tastes

167.              Consider the market for bicycles. If a dealer cuts prices by 10 percent and sells 20 percent
more bikes, then demand for bicycles is

a. inelastic, and total revenue will increase

b. elastic, and total revenue will increase

c. inelastic, and total revenue will decrease

d. elastic, and total revenue will decrease

e. unit elastic, and total revenue will remain the same

168.              Demand for farm products, in general, is said to be relatively price inelastic. Therefore,
U.S. farm policy, which is designed to keep farm prices above equilibrium, should

a. decrease farm incomes

b. increase farm incomes

c. not affect farm incomes

d. reduce the number of farmers

e. lower food prices for consumers

169.              Inferior goods have an income elasticity of demand that is

a. positive

b. negative

c. 0

d. greater than 1 in absolute value

e. equal to 1 in absolute value

170.              For which of the following medical goods or services is the income elasticity of demand
largest?

a. emergency services after a car accident

b. measles shots

c. physical examinations for life insurance applications

d. medical tests to diagnose specific symptoms

e. face-lifts

Dec 10 2019 View more View Less