Ch.20 Quiz

Instructions
Please read the questions carefully.

This assessment is worth 100 points.

  1. A "change in demand" means:   (4 points)

    a.  
    b.  
    c.  
    d.  

  2. If the price of product K decreases, the demand for close substitute product M will:   (4 points)

    a.  
    b.  
    c.  
    d.  

  3. The price elasticity of demand coefficient indicates:   (4 points)

    a.  
    b.  
    c.  
    d.  

  4. The price elasticity of demand of a straight-line demand curve is:   (4 points)

    a.  
    b.  
    c.  
    d.  



  5. Refer to the above diagram. Between prices of $5.70 and $6.30:   (4 points)

    a.  
    b.  
    c.  
    d.  




  6. Suppose that the above total revenue curve is derived from a particular linear demand curve. That demand curve must be:   (4 points)

    a.  
    b.  
    c.  
    d.  



  7. Refer to the above diagram which is a rectangular hyperbola, that is, a curve such that each rectangle drawn from any point on the curve will be of identical area. In comparing the price elasticity and the slope of this demand curve we can conclude that the:   (4 points)

    a.  
    b.  
    c.  
    d.  



  8. Refer to the above diagram. In the P1P2 price range demand is:   (4 points)

    a.  
    b.  
    c.  
    d.  





  9. Refer to the above diagram. If price falls to P2, total revenue will become area(s):   (4 points)

    a.  
    b.  
    c.  
    d.  





  10. Refer to the above diagram. The decline in price from P1 to P2 will:   (4 points)

    a.  
    b.  
    c.  
    d.  

  11. The demands for such products as salt, bread, and electricity tend to be:   (4 points)

    a.  
    b.  
    c.  
    d.  

  12. Which of the following statements is correct?   (4 points)

    a.  
    b.  
    c.  
    d.  

  13. Price elasticity of supply is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  14. A supply curve that is a vertical straight line indicates that:   (4 points)

    a.  
    b.  
    c.  
    d.  

  15. An increase in demand will increase equilibrium price to a greater extent:   (4 points)

    a.  
    b.  
    c.  
    d.  

  16. The formula for cross elasticity of demand is percentage change in:   (4 points)

    a.  
    b.  
    c.  
    d.  



  17. The above diagram suggests that:   (4 points)

    a.  
    b.  
    c.  
    d.  




  18. Refer to the above diagrams. The case of complementary goods is represented by figure:   (4 points)

    a.  
    b.  
    c.  
    d.  




  19. Refer to the above diagrams. In which case would the coefficient of income elasticity be positive?   (4 points)

    a.  
    b.  
    c.  
    d.  




  20. Refer to the above diagram. A government-set price ceiling is best illustrated by:   (4 points)

    a.  
    b.  
    c.  
    d.  

  21. Price floors and ceiling prices:   (4 points)

    a.  
    b.  
    c.  
    d.  

  22. If a legal ceiling price is set above the equilibrium price:   (4 points)

    a.  
    b.  
    c.  
    d.  

  23. The smaller the number of good substitutes for a product, the greater will be the price elasticity of demand for it.   (4 points)

    a.  
    b.  

  24. The higher a price floor is above the equilibrium price, the greater will be the surplus output.   (4 points)

    a.  
    b.  

  25. Answer the next question(s) on the basis of the following demand and supply data:



    Refer to the above data. The supply of this product is inelastic in the $6-$5 price range.   (4 points)

    a.  
    b.  



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