Question 1

Suppose the supply of product X is perfectly inelastic.If there is an increase in the demand for this product,the:

Accepted Answer

A)  price of the product will remain constant
B)  quantity demanded will rise
C)  quantity supplied will rise
D)  quantity supplied of the product will remain unchanged in the immediate run
E)  quantity supplied will fallF) A) and D)
G) A) and E)

Question 2

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.It can be concluded that:

Accepted Answer

A)  the demand for pizza is elastic above $5 and inelastic below $5
B)  the demand for pizza is elastic both above and below $5
C)  the demand for pizza is inelastic above $5 and elastic below $5
D)  the demand for pizza is inelastic both above and below $5
E)  $5 is not the equilibrium price of pizzaF) A) and B)
G) All of the above

Question 3

Which of the following products is most likely to have an elastic demand?

Accepted Answer

A)  toothpicks
B)  cigarettes
C)  insulin
D)  coffee
E)  automobilesF) C) and D)
G) A) and B)

Question 4

If a business can sell 3000 units of a product at $10 per unit and 5000 units at $8 per unit,its demand is:

Accepted Answer

A)  elastic
B)  perfectly elastic
C)  inelastic
D)  unit-elastic
E)  perfectly inelasticF) A) and C)
G) A) and D)

Exam 3: Elasticity

If a business can sell 3000 units of a product at $10 per unit and 5000 units at $8 per unit,its demand is:

Correct Answer
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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.It can be concluded that:

Correct Answer
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Suppose the supply of product X is perfectly inelastic.If there is an increase in the demand for this product,the:

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Which of the following products is most likely to have an elastic demand?

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Exam 3: Elasticity

If a business can sell 3000 units of a product at $10 per unit and 5000 units at $8 per unit,its demand is:

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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.It can be concluded that:

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Suppose the supply of product X is perfectly inelastic.If there is an increase in the demand for this product,the:

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Which of the following products is most likely to have an elastic demand?

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