Ch 5
Name: ________________________ Class: ___________________ Date: __________
ID: A
CH 5
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____
____
____
____
____
1. Using the midpoint method, if the price of an airline ticket from Orlando to Pittsburgh falls from $275 to
$238, the percentage change in price is
a. 1442 percent.
b. 14.42 percent.
c. 15.54 percent.
d. 13.45 percent.
e. 68.00 percent.
2. When the percentage change in the quantity demanded equals the percentage change in price, then demand is
a. inelastic.
b. unit elastic.
c. elastic.
d. irrelevant.
e. undefined.
3. Which of the following statements is correct?
a. The demand for New Balance shoes is more elastic than the demand for shoes in general.
b. The demand for salt is very elastic.
c. The demand for luxuries is less elastic than the demand for necessities.
d. The demand for a narrowly defined good is less elastic than the demand for a more broadly defined good.
e. The larger the proportion of income spent on a good, the smaller the elasticity of demand.
4. If the price elasticity of demand for a product is 3.0, then when its price falls from $1.50 to $1.25, the quantity demanded will increase by (Hint: Use the midpoint method for the percentage change in price.)
a. 0.18 percent.
b. 1.81 percent.
c. 54.5 percent.
d. 72.0 percent.
e. 42.2 percent.
5. Using the data in the table above, when the price of a skirt rises from $20 to $35, what is the price elasticity of demand? (Use the midpoint method.)
a. 0.33
b. 0.25
c. 1.00
d. 1.33
e. 3.00
1
Name: ________________________
____
____
____
____
ID: A
6. If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded, then demand is
a. elastic and total revenue decreases.
b. elastic and total revenue increases.
c. inelastic and total revenue decreases.
d. elastic, but we cannot tell what happens to total revenue without more information.
e. total revenue decreases but we cannot
ID: A
CH 5
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____
____
____
____
____
1. Using the midpoint method, if the price of an airline ticket from Orlando to Pittsburgh falls from $275 to
$238, the percentage change in price is
a. 1442 percent.
b. 14.42 percent.
c. 15.54 percent.
d. 13.45 percent.
e. 68.00 percent.
2. When the percentage change in the quantity demanded equals the percentage change in price, then demand is
a. inelastic.
b. unit elastic.
c. elastic.
d. irrelevant.
e. undefined.
3. Which of the following statements is correct?
a. The demand for New Balance shoes is more elastic than the demand for shoes in general.
b. The demand for salt is very elastic.
c. The demand for luxuries is less elastic than the demand for necessities.
d. The demand for a narrowly defined good is less elastic than the demand for a more broadly defined good.
e. The larger the proportion of income spent on a good, the smaller the elasticity of demand.
4. If the price elasticity of demand for a product is 3.0, then when its price falls from $1.50 to $1.25, the quantity demanded will increase by (Hint: Use the midpoint method for the percentage change in price.)
a. 0.18 percent.
b. 1.81 percent.
c. 54.5 percent.
d. 72.0 percent.
e. 42.2 percent.
5. Using the data in the table above, when the price of a skirt rises from $20 to $35, what is the price elasticity of demand? (Use the midpoint method.)
a. 0.33
b. 0.25
c. 1.00
d. 1.33
e. 3.00
1
Name: ________________________
____
____
____
____
ID: A
6. If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded, then demand is
a. elastic and total revenue decreases.
b. elastic and total revenue increases.
c. inelastic and total revenue decreases.
d. elastic, but we cannot tell what happens to total revenue without more information.
e. total revenue decreases but we cannot