ECON 110 ZIRLOTT TEST 2
QUESTIONS AND CORRECT
ANSWERS
If a good has an elastic demand, then when the price of the good rises ✅✅CORRECT ANSW-the %
change in quantity demanded will be greater than the % change in price
what is the elasticity of supply of a good if a producer cannot easily change the quantity supplied of
that good? ✅✅CORRECT ANSW-inelasticity
If Levi Jeans Co, raises the price of its jeans from $25 to $30 and finds that consumers decrease their
quantity demanded from 750 to 600 pairs of jeans, then the demand for Levi jeans within this price
range is ✅✅CORRECT ANSW-price elastic
Dave is willing to pay $7 for a Big Mac meal, Greg is willing to pay $6.50 for a Big Mac meal, and
Austin is willing to pay $5 for a Big Mac meal at McDonalds but the restaurant is currently selling the
Big Mac meal for $5.50. If the price is $5.50 for the Big Mac meal, their consumer surpluses would be
✅✅CORRECT ANSW-$1.50 for Dave, $1 for Greg, and $0 for Austin
a relatively flat demand curve is more likely to be ✅✅CORRECT ANSW-price elastic
If a change in the price of a good results in no change in total revenue, then ✅✅CORRECT ANSW-
the demand for the good must be unit elastic
If a price ceiling is a binding constraint on the market ✅✅CORRECT ANSW-the equilibrium price
must be above the price ceiling
If a 2% rise in price leads to a 4% decrease in quantity demanded, then price elasticity of demand is
✅✅CORRECT ANSW-2, therefore elastic
A perfectly elastic demand implies that ✅✅CORRECT ANSW-any rise in price will result in a
quantity demanded of zero
it does not matter wether a tax is levied on the buyers or the sellers of a good becase
✅✅CORRECT ANSW-buyers and sellers will share the burden of the tax
QUESTIONS AND CORRECT
ANSWERS
If a good has an elastic demand, then when the price of the good rises ✅✅CORRECT ANSW-the %
change in quantity demanded will be greater than the % change in price
what is the elasticity of supply of a good if a producer cannot easily change the quantity supplied of
that good? ✅✅CORRECT ANSW-inelasticity
If Levi Jeans Co, raises the price of its jeans from $25 to $30 and finds that consumers decrease their
quantity demanded from 750 to 600 pairs of jeans, then the demand for Levi jeans within this price
range is ✅✅CORRECT ANSW-price elastic
Dave is willing to pay $7 for a Big Mac meal, Greg is willing to pay $6.50 for a Big Mac meal, and
Austin is willing to pay $5 for a Big Mac meal at McDonalds but the restaurant is currently selling the
Big Mac meal for $5.50. If the price is $5.50 for the Big Mac meal, their consumer surpluses would be
✅✅CORRECT ANSW-$1.50 for Dave, $1 for Greg, and $0 for Austin
a relatively flat demand curve is more likely to be ✅✅CORRECT ANSW-price elastic
If a change in the price of a good results in no change in total revenue, then ✅✅CORRECT ANSW-
the demand for the good must be unit elastic
If a price ceiling is a binding constraint on the market ✅✅CORRECT ANSW-the equilibrium price
must be above the price ceiling
If a 2% rise in price leads to a 4% decrease in quantity demanded, then price elasticity of demand is
✅✅CORRECT ANSW-2, therefore elastic
A perfectly elastic demand implies that ✅✅CORRECT ANSW-any rise in price will result in a
quantity demanded of zero
it does not matter wether a tax is levied on the buyers or the sellers of a good becase
✅✅CORRECT ANSW-buyers and sellers will share the burden of the tax
