Econ Test 1: Chapter 6 – Flashcards

Most demand curves are relatively elastic in the upper-left portion because the original price:

The larger the positive cross elasticity coefficient of demand between products X and Y, the:

Compared to coffee, we would expect the cross elasticity of demand for:

If the elasticity coefficient of supply is 0.7, supply is elastic.

If the University Chamber Music Society decides to raise ticket prices to provide more funds to finance concerts, the Society is assuming that the demand for tickets is:

The supply of known Monet paintings is:

In which of the following instances will total revenue decline?

The supply of product X is perfectly inelastic if the price of X rises by:

If the demand for bacon is relatively elastic, a 10 percent decline in the price of bacon will:

The price elasticity of demand is generally:

A manufacturer of frozen pizzas found that total revenue decreased when price was lowered from $5 to $4. It was also found that total revenue decreased when price was raised from $5 to $6. Thus,

A perfectly inelastic demand schedule:

Assume that a 6 percent increase in income in the economy produces a 3 percent increase in the quantity demanded of good X. The coefficient of income elasticity of demand is:

the larger the number of substitutes and the greater the price elasticity of demand.

the supply of higher education in the United States is:

For a linear demand curve:

the demand for Coca-Cola to be more price elastic or inelastic than the demand for soft drinks in general.

A cross elasticity of demand coefficient of +2.5 indicates that the two products are substitutes. true or false

Gigantic State University raises tuition for the purpose of increasing its revenue so that more faculty can be hired. GSU is assuming that the demand for education at GSU is:

The more time consumers have to adjust to a change in price:

Which goods (with their respective income elasticity coefficients in parentheses) will most likely suffer a decline in demand during a recession?

A linear demand curve has a constant elasticity over the full range of the curve. true or false?

We would expect the cross elasticity of demand between dress shirts and ties to be:

The price of product X is reduced from $100 to $90 and, as a result, the quantity demanded increases from 50 to 60 units. Therefore, demand for X in this price range:

The demand for autos is likely to be:

Antiques tend to have highly inelastic supply curves. true or false

If demand for a product is elastic, the value of the price elasticity coefficient is:

We would expect the coefficient of cross elasticity of demand for DVD players and DVDs to be positive. true or false

In which of the following cases will total revenue increase?

A perfectly inelastic demand curve:

The demand for a necessity whose cost is a small portion of one's total income is:

The demand schedules for such products as eggs, bread, and electricity tend to be:

Suppose Aiyanna's Pizzeria currently faces a linear demand curve and is charging a very high price per pizza and doing very little business. Aiyanna now decides to lower pizza prices by 5 percent per week for an indefinite period of time. We can expect that each successive week:

The state legislature has cut Gigantic State University's appropriations. GSU's Board of Regents decides to increase tuition and fees to compensate for the loss of revenue. The board is assuming that the:

It takes a considerable amount of time to increase the production of pork. This implies that:

The price elasticity of demand for widgets is 0.80. Assuming no change in the demand curve for widgets, a 16 percent increase in sales implies a:

The price elasticity of demand coefficient measures:

Which type of goods is most adversely affected by recessions?

If the coefficient of income elasticity of demand is positive, the product is an inferior good. true or false

Which of the following generalizations is not correct?

The greater the ease of shifting resources from product X to product Y in the production process, the greater is the elasticity of supply of product Y. true or false

The formula for cross elasticity of demand is percentage change in:

Suppose the price of a product rises and the total revenue of sellers increases.

The demand for a product is inelastic with respect to price if:

Studies show that the demand for gasoline is: