Microeconomics Chapter 19 Exam Questions and Answers Latest Update Graded A+
If a firm increases the price of their product in the elastic portion of the demand curve, total revenues will
A.
stay the same.
B.
increase.
C.
decrease
D.
first increase and then decrease. - Answers C.
decrease...
If a firm increases the price of their product in the elastic portion of the demand curve, total revenues
will
A.
stay the same.
B.
increase.
C.
decrease
D.
first increase and then decrease. - Answers C.
decrease
Suppose that the cross price elasticity of demand between ski lift tickets and ski rentals is −0.20.
What would you expect to happen to the sales of ski rentals if the price of ski lift tickets rises by 15
percent?
The demand for ski rentalsski rentals would
___________
.
The demand for ski rentalsski rentals would fall by
___________percent. - Answers fall; 3.0
We should expect the cross price elasticity of butter and margarine to be
A.
positive since they are substitutes.
B.
, positive since they are complements.
C.
negative since they are complements.
D.
negative since they are substitutes. - Answers A.
positive since they are substitutes.
What does the price elasticity of demand measure?
A.
The amount that the demand curve shifts when there is a change in the price of the good.
B.
How long it takes consumers to react when there is a change in the price of a good.
C.
The change in quantity demanded when there is a 1% change in income.
D.
The responsiveness of quantity demanded to a change in the price of a good. - Answers D.
The responsiveness of quantity demanded to a change in the price of a good.
A Chinese restaurant finds that when it prices the dinner buffet at $10, the restaurant sells 150 per day.
When the price is reduced to $9, the restaurant sells 200 per day. Based on this information, use the
average-values formula to find the price elasticity of demand for the dinner buffet. Provide the absolute
value of the price elasticity of demand.
A.
2.71
.B.
3.33
C.
0.37
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