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ECO 202 Final Exam – Questions With Complete Solutions
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ECO 202 Final Exam – Questions With Complete Solutions
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ECO 202 Exam: Questions With Precise SolutionsIf at a price of $24, Octavia sells 36 home-grown orchids and at $30 she sells
23 home-grown orchids, the demand for her orchids is
a. elastic
b. inelastic
c. unit elastic
d. perfectly elastic Right Ans - a. elastic
If demand for cell phone service in inelastic then
a. the percentage change in quantity demanded is greater than the percentage
change in price (in absolute value)
b. the percent change in quantity demanded is equal to the percent change in
price
c. the quantity demanded does not change in response to changes in price
d. the percentage change in quantity demanded is less than the percent
change in price (in absolute value) Right Ans - d. the percentage change in
quantity demanded is less than the percent change in price (in absolute value)
If the demand for a life-saving drug was perfectly inelastic and the price
doubles, the quantity demanded would
a. also double
b.decrease by %50
c. be cut in half
d. remain constant Right Ans - d. remain constant
which of the following products comes closets to having a perfectly inelastic
demand
a. gasoline
b. cholesterol medication in general
,c. iphones
d. bus rides Right Ans - b. cholesterol medication in general
Most people buy salt infrequently and in small quantities. Even a doubling of
price of salt is likely to result in a small decline in the quantity of salt
demanded. Therefore
a. the demand for salt will be perfectly inelastic
b. salt is a normal good
c. the demand for salt is relatively inelastic
d. the price elasticity of demand for salt is greater than 1 Right Ans - c. the
demand for salt is relatively inelastic
if the price of elasticity of deman for canned soup is estimated at -1.62. What
happens to sales revenue if the price of canned soup rises
a. it falls by 162 percent
b. it rises by 1.62 percent
c. it falls
d. it rises Right Ans - c. it falls
total revenue is equal to
a. the amount of funds earned by a firm minus its costs of production
b. the total quantity sold of a product over a given period of time
c. the price of a product multiplied by the number of units of the product sold
d. the monetary value of the capital Right Ans - c. the price of a product
multiplied by the number of units of the product sold
Which of the following statements are true
a.if the price of a good is lowered and total revenue decreases, demand is
elastic
b. if the price of a good is raised and total revenue does not change, demand is
perfectly elastic
, c. if the price of a good is raised and total revenue increases, demand is
inelastic
d. if the price of a good is lowered and total revenue increases, demand is
inelastic Right Ans - c. if the price of a good is raised and total revenue
increases, demand is inelastic
Income elasticity measures how a goods quantity demanded responds to
a. change in the goods price
b. change in the price of another
c. change in buyers' incomes
d. producers incomes Right Ans - c. change in buyers' incomes
Economists estimated that the price elasticity of beer is -0.30 and the income
elasticity of beer is .09. this means that
a. an increase in the price of beer will increase the quantity demanded of beer
and beer is the normal good
b. an increase in the price of beer will lead to an increase in revenue for beer
sellers and beer is the normal good
c. a decrease in the price of beer will lead to an increase in revenue for beer
sellers and beer is an inferior good
d. an increase in the price of beer will lead to a decrease in the quantity
demanded of beer is a luxury Right Ans - b. an increase in the price of beer
will lead to an increase in revenue for beer sellers and beer is the normal good
Consider the following pairs of items:
Shampoo and conditioner, iphones and earbuds, laptop and computer desk
top, beef and pork, air traveler and weed killer.
Which of the pairs listed will have a negative cross-price elasticity
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