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

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

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 __________________.

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

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

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

The demand for Caesar salad at Mike's Roadside Restaurant is a straight line. When the price of a Caesar salad is £2.50, the demand for Caesar salad is elastic; and when the price is £2.00, the demand is unit elastic. If Mike's cuts the price from £2.50 to £2.00, its total revenue from Caesar salad ___________________.

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

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

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

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; decrease
positive; decrease
positive; increase
negative; increase

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

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

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 __________.

5/3 percent
5 percent
15 percent
3 percent

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 _____________.

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

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