The figure illustrates the demand for hamburgers. When the price is $1.00 a hamburger, the elasticity of demand is __________ and a 1 percent increase in the price will _________ the quantity of hamburgers demanded by __________ percent.

5.00; decrease; 5.00
2.50; increase; 2.50
0.40; decrease; 0.40
1.00; decrease; 0.40

A decrease in the supply of sugar increases the price from $0.95 a packet to $1.05 a packet. The quantity decreases from 55 packets a day to 45 packets a day. The price elasticity of demand of sugar is ______.

-0.5
2.0
-2.0
0.5

Suppose that taxation accountants increase the price for their service by 20 percent. The short-run demand for their service is less elastic than the long-run demand because in the long run consumers will ________________.

try to avoid paying their income tax
find other ways to calculate the income tax they must pay
experience an increase in income
spend less on this service

The figure illustrates the demand for magazines. Newsagents will maximize their total revenue when they ________________________.

sell as many magazines as it can
sell 375 magazines a day
sell 750 magazines a day
charge $2.50 a magazine

When the price of a Caesar salad is $5.00, the demand for Caesar salads is elastic, and when the price is $4.00, the demand is unit elastic. If Mike's Roadside Restaurant cuts the price from $5.00 to $4.00, its total revenue from Caesar salads ___________________.

will decrease
will increase
might increase, decrease, or remain the same
will remain the same

The figure illustrates the demand for peanuts. If the price falls from $12 to $9 a bag, total revenue will ______________, but if the price rises from $3 to $6 a bag, total revenue will ______________.

decrease; increase
increase; increase
increase; decrease
decrease; decrease

If tea and coffee are substitutes, the cross elasticity of coffee with respect to the price of tea will be _________ and an increase in the price of tea will _________ the demand for coffee.

negative; increase
positive; increase
positive; decrease
negative; decrease

If a 5 percent increase in the price of good A leads to a 4 percent decrease in the demand for good B, then __________________.

both goods are normal goods
the goods are complements
the goods are substitutes
only one good is a normal good

The income elasticity of demand of vacations is 5. If incomes increase by 3 percent next year, the quantity of vacations demanded at today's price will increase by _________ percent.

3
15
5
5/3

If a 10 percent change in the price of a good leads to a 5 percent change in the quantity supplied, then the supply of the good is _______________ and the elasticity of supply is _____________.

inelastic; 0.5
elastic; 2.0
elastic; -2.0
inelastic; -0.5

Please enter your name and press the SEND button