Question :
51) Refer to Figure 4-2. Demand inelastic
A) over the entire : 1384159
51) Refer to Figure 4-2. Demand is inelastic
A) over the entire demand curve in diagram 1.
B) over the entire demand curve in diagram 3.
C) over section (a) of the demand curve in diagram 1.
D) over section (b) of the demand curve in diagram 1.
E) at the midpoint between sections (a) and (b) of the demand curve in diagram 1.
52) Refer to Figure 4-2. There is good reason to suppose that, of the four goods whose demand curves are shown in diagrams 1-4 of the figure, the good that has the fewest close substitutes is shown in
A) diagram 1.
B) diagram 2.
C) diagram 3.
D) diagram 4.
E) There is not enough information to determine this.
53) Suppose you are advising the government on changes in the gasoline market. The current price is $1.00 per litre and the quantity demanded is 2.5 million litres per day. Short-run price elasticity of demand is constant at 0.3. If the supply of gasoline is reduced so that the price rises to $1.50 per litre, then quantity demanded is predicted to fall in the short run by
A) 15%, and total expenditure will rise.
B) 15%, and total expenditure will fall.
C) 50%, and total expenditure will fall.
D) 12%, and total expenditure will rise.
E) 13.3%, and total expenditure will rise.
54) Suppose you are advising the government on changes in the gasoline market. The current price is $1.00 per litre and the quantity demanded is 2.5 million litres per day. Long-run price elasticity of demand is constant at 0.8. If the supply of gasoline is reduced so that the price rises to $1.50 per litre, then quantity demanded is predicted to fall in the long run by
A) 12%, and total expenditure will fall.
B) 32%, and total expenditure will rise.
C) 15%, and total expenditure will rise.
D) 15%, and total expenditure will fall.
E) 50%, and total expenditure will rise.
55) Suppose a fast-food chain determines that the price elasticity of demand for its hamburgers is 1.7, and the price of the hamburger is currently $4.00. What will be the effect on quantity demanded and total expenditure on this chain’s hamburgers if the price is increased to $6.00?
A) Quantity demanded will fall by 68% and total expenditure will decrease.
B) Quantity demanded will fall by 11.76% and total expenditure will decrease.
C) Quantity demanded will fall by 17% and total expenditure will increase.
D) Quantity demanded will fall by 1.7% and total expenditure will increase.
E) Quantity demanded will fall by 34% and total expenditure will decrease.
56) Rania is selling boxes of cookies door to door in her neighbourhood. At a price of $10 per box she sold 40 boxes per day. When the price was reduced to $4 per box she sold 100 boxes per day. Assuming that the demand conditions were unchanged, what is the price elasticity of demand for Rania’s cookies?
A) -1.7
B) 0
C) 0.85
D) 1
E) 1.17
57) Every month Olivier buys exactly 6 take-out pizzas even though the price may fluctuate significantly. Apparently, Olivier’s price elasticity of demand for take-out pizza is
A) -1.
B) 0.
C) 1.
D) 6.
E) infinity.
58) Suppose an analysis of the possible effects of increases in university tuition fees predicts that a 10% increase in tuition fees will result in a 3% decline in enrolment. What is the implied price elasticity of demand for university attendance?
A) 0
B) 0.3
C) 3
D) 7
E) 10
59) Suppose an analysis of the possible effects of increases in university tuition fees predicts that a 10% increase in tuition fees will result in a 3% decline in enrolment. Given the information this provides about price elasticity of demand, what is the predicted effect on total expenditure on tuition fees?
A) total expenditure will decrease
B) total expenditure will decrease by 7%
C) total expenditure will decrease by 3%
D) total expenditure will increase
E) total expenditure will remain constant
60) Refer to Figure 4-2. As price decreases, total expenditure increases, reaches a maximum, and then decreases for the demand curve in diagram(s)
A) 1.
B) 2.
C) 3.
D) 4.
E) 1 and 3.
