Author: Christine Farr


1: If the demand for a good is elastic, then total revenue A: increases as price increases B: remains constant as quantity demanded increasesC: Increases as price decreases D: Decreases as quantity demanded increases E: Decreases as price decreases#2: If price elasticity of demand is -0.5A: a 1% decrease in quantity demanded leads to a 0.5% decrease in price B: a 1% decrease in price leads to a 0.5% in quantity demandedC: a 50% decrease in price leads to a 1% increase in quantity demandedD: a 50% decrease in price leads to a 100% increase in quantity demandedE: Demand is elastic#3: Demand is inelastic only if:A: Price elasticity has an absolute value of 1B: Price elasticity has an absolute value greater than 1C: Price elasticity has an absolute value less then 1D: Price elasticity is negativeE: Consumers do not respond to a change in price#4: If the administration raises tuition on our campus in order to increase revenue, it will:A: Not be successful if the demand curve slopes downwardB: Be successful if demand is elastic C: Be successful if demand is inelasticD: Be successful if supply is elasticE: Be successful if supply is inelastic #5: If demand is unit elastic, a price reduction will:A: increase revenuesB: Reduce revenuesC: Reduce quantity demanded D: Have no effect on revenuesE: Increase profits#6: Along a straight line downward sloping demand curve, elasticity is:A: A constant, but its value cannot be determined without measurementB: Constant and equal to an absolute value of oneC: Greater at higher pricesD: Greater at lower pricesE: Greater in the middle#7: For which of the following products in the consumers demand curve most likely to be vertical:A: Lobster, for a seafood loverB: Cars, for high school studentsC: Insulin, for a diabeticD: Compact disks, for a music loverE: Beef, for a food lover#8: The demand curve for a good that has many perfect substitutes in consumption is likely to be:A: Upward slopingB: SteepC: Highly inelasticD: Horizontal E: Vertical#9: If an increase in price from $1 to $2 per unit leads to an increase in quantity supplied from 20 to 100 units, then the value of price elasticity of supply is:A: 0.38B: 2C: 2.67D: 4E: 8#10: The supply of painting by van gogh is most likely to be:A: Of infinite elasticity because supply is limitedB: Of high elasticity because supply is limitedC: Elastic because the painting are luxury goodsD: Inelastic because supply is limitedE: Unit elastic#11: Todays supply curve of dorm rooms on campus is likely to be:A: Downward sloping B: Relatively flatC: Vertical D: HorizontalE: Price elastic #12: As producers have more time to adjust to a price change, price elasticity of supply:A: IncreasesB: DecreasesC: Remains the sameD: Rises and then fallsE: Falls and then rises#13: An inferior good is:A: Any good of low qualityB: One that consumers buy less of as the price risesC: One that consumers buy less of as thier income risesD: One that has few substitutes E: Any good made with inexpensive labor#14: If we wanted to prove that macaroni is an inferior good, we would test the___________of macaroni and get a ___________:A: cross-price elasticity; negative numberB: Income elasticity; number less than 1C: Income elasticity; positive numberD: Price elasticity of demand; number greater then negative 1E: Income elasticity; negative number#15: Economics distinguish between normal and and inferior goods using:A: Price elasticity of demandB: Price elasticity of supplyC: Income elasticity of demandD: Cross price elasticity of demandE: Tax incidence#16: The value of cross price elasticity of demand between golf balls and golf clubs is:A: Negative B: Positive C: 0D: Greater then 1E: Less then 1#17: The value of cross price elasticity of demand between orange soda and grape soda is:A: NegativeB: PositiveC: 0D: Between -1 and 0E: Less then -1#18: Utility is determined by an individuals:A: IncomeB: PriceC: Relative PriceD: ProfitE: Tastes and preferences#19

See More
Try a College Course Free

Sophia’s self-paced online courses are a great way to save time and money as you earn credits eligible for transfer to over 2,000 colleges and universities.*

Begin Free Trial
No credit card required

25 Sophia partners guarantee credit transfer.

221 Institutions have accepted or given pre-approval for credit transfer.

* The American Council on Education's College Credit Recommendation Service (ACE Credit®) has evaluated and recommended college credit for 20 of Sophia’s online courses. More than 2,000 colleges and universities consider ACE CREDIT recommendations in determining the applicability to their course and degree programs.