Econ Ch5

A good tends to have a small price elasticity of

demand if

• there are many close substitutes.

• the good is a necessity.

• the market is narrowly defined.

• the long-run response is being measured.

An increase in a good's price reduces the total amount

consumers spend on the good if the _________

elasticity of demand is _________ than one.

• income; greater

• income; less

• price; greater

• price; less

A linear, downward-sloping demand curve is

• inelastic.

• unit elastic.

• elastic.

• inelastic at some points, and elastic at others.

The citizens of Capoo spend a higher fraction

of their income on food than do the citizens of

Lanlan. The reason could be that

• Capoo has lower food prices, and the price

  elasticity of demand is zero.

• Capoo has lower food prices, and the price

  elasticity of demand is 0.5.

• Capoo has lower income, and the income

  elasticity of demand is 0.5.

• Capoo has lower income, and the income

  elasticity of demand is 1.5.

The price of a good rises from $16 to $24, and

the quantity supplied rises from 90 to 110 units.

Calculated with the midpoint method, the price

elasticity of supply is

• 5.

• 2.

• 1/2.

• 1/5.

The ability of firms to enter and exit a market over

time means that, in the long run,

• the demand curve is more elastic.

• the demand curve is less elastic.

• the supply curve is more elastic.

• the supply curve is less elastic.

An increase in the supply of grain will reduce the

total revenue grain producers receive if

• the supply curve is elastic.

• the supply curve is inelastic.

• the demand curve is elastic.

• the demand curve is inelastic.

Because the demand curve for oil is _________

elastic in the long run, OPEC’s reduction in the

supply of oil had a _________ impact on the price in

the long run than it did in the short run.

• more; larger

• more; smaller

• less; larger

• less; smaller

Over time, technological advances increase

consumers’ incomes and reduce the price of

smartphones. Each of these forces increases

the amount consumers spend on smartphones if

the income elasticity of demand is greater than

_________ and the price elasticity of demand is

greater than _________.

• zero; zero

• zero; one

• one; zero

• one; one