Question : 121) If, when the price falls, total revenue increases, demand : 1239041

 

121) If, when the price falls, total revenue increases, demand is

A) elastic.

B) inelastic.

C) unit elastic.

D) perfectly inelastic.

E) None of the above answers is correct because total revenue always decreases when the price of the good falls.

122) The price elasticity of demand for an agricultural product is 0.4. This value means that, when the quantity decreases 1 percent, the price

A) falls 4 percent.

B) rises 4 percent.

C) falls 2.5 percent.

D) rises 2.5 percent.

E) rises 0.25 percent.

123) The price elasticity of demand is a measure of the extent to which the quantity demanded of a good changes when ________ and all other influences on buyers’ plans remain the same.

A) income changes

B) the price of a related good changes

C) the price of the good changes

D) the demand alone changes

E) both the demand and the supply simultaneously change

124) Suppose the price of a movie falls from $9 to $7. Using the midpoint method, what is the percentage change in price?

A) 33 percent

B) -33 percent

C) 25 percent

D) -25 percent

E) -97 percent

125) Suppose the price of a tie rises from $45 to $55. Using the midpoint method, what is the percentage change in price?

A) 10 percent

B) -10 percent

C) 20 percent

D) -20 percent

E) 100 percent

126) Demand is elastic if

A) consumers respond strongly to changes in the product’s price.

B) a large percentage change in price brings about a small percentage change in quantity demanded.

C) a small percentage change in price brings about a small percentage change in quantity demanded.

D) the quantity demanded is not responsive to price changes.

E) the demand curve is vertical.

127) During the winter of 2011-2012, the price of fuel oil increased enormously but the quantity demanded decreased only a little. This response indicates that the demand for fuel oil was

A) inelastic.

B) elastic.

C) unit elastic.

D) perfectly elastic.

E) perfectly inelastic.

128) If substitutes for a good are readily available, the demand for that good

A) does not change substantially if the price rises.

B) does not change substantially if the price falls.

C) is inelastic.

D) is elastic.

E) Both answers A and B are correct.

129) If the price of a product increases by 5 percent and the quantity demanded decreases by 5 percent, then the elasticity of demand is

A) 0.

B) 1.

C) indeterminate.

D) 5.

E) 25.

130) The price of a bag of pretzels rises from $2 to $3 and the quantity demanded decreases from 100 to 60. What is the price elasticity of demand?

A) 1.0

B) 1.25

C) 40.0

D) 20.0

E) 0.80

131) When a firm raises the price of its product, what happens to its total revenue?

A) If demand is elastic, total revenue decreases.

B) If demand is unit elastic, total revenue increases.

C) If demand is inelastic, total revenue decreases.

D) If demand is elastic, total revenue increases.

E) If demand is unit elastic, total revenue decreases.

 

 

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