Worksheet Elasticity Answer 1

Chapter 5 Elasticity and Its Application
Multiple Choice
Table 5-2
Price
Quantity
$100
0
$80
10
$60
20
$40
30
$20
40
$0
50 102. Refer to Table 5-2. Using the midpoint method, if the price falls from $80 to $60, the absolute value of the price elasticity of demand is
a.
20.
b.
10.
c.
2.33.
d.
0.43.
ANS: C PTS: 1 DIF: 2 REF: 5-1
NAT: Analytic LOC: Elasticity TOP: Midpoint method | Price elasticity of demand
MSC: Analytical 103. Refer to Table 5-2. Using the midpoint method, if the price falls from $60 to $40, the absolute value of the price elasticity of demand is
a.
0.4.
b.
1.
c.
4.
d.
20.
ANS: B PTS: 1 DIF: 2 REF: 5-1
NAT: Analytic LOC: Elasticity TOP: Midpoint method | Price elasticity of demand
MSC: Analytical 104. Refer to Table 5-2. Using the midpoint method, if the price falls from $40 to $20, the absolute value of the price elasticity of demand is
a.
20.
b.
10.
c.
2.33.
d.
0.43.
ANS: D PTS: 1 DIF: 2 REF: 5-1
NAT: Analytic LOC: Elasticity TOP: Midpoint method | Price elasticity of demand
MSC: Analytical 105. Refer to Table 5-2. Using the midpoint method, if the price falls from $80 to $60, the price elasticity of demand is
a.
zero.
b.
unit elastic.
c.
inelastic.
d.
elastic.
ANS: D PTS: 1 DIF: 2 REF: 5-1
NAT: Analytic LOC: Elasticity TOP: Midpoint method | Price elasticity of demand
MSC: Analytical 106. Refer to Table 5-2. Using the midpoint method, if the price falls from $60 to $40, the price elasticity of demand is
a.
zero.
b.
inelastic.
c.
unit elastic.
d.
elastic.
ANS: C PTS: 1 DIF: 2 REF: 5-1
NAT: Analytic LOC: Elasticity TOP: Midpoint method | Price elasticity of demand
MSC: Analytical 107. Refer to Table 5-2. Using the midpoint method, if the price falls from $40 to $20, the price elasticity of demand is
a.
zero.
b.
inelastic.
c.
unit elastic.
d.
elastic.
ANS: B PTS: 1 DIF: 2 REF: 5-1
NAT: Analytic LOC: Elasticity TOP: Midpoint method | Price elasticity of demand
MSC: Analytical

Figure 5-2

140. Refer to Figure 5-2. As price falls