Test Bank for Microeconomics, 11th Edition: Parkin (The Ultimate Guide for
2026/2027)
1 Price Elasticity of Demand
1) Suppose the price of burgers increases from $2 to $3 each. The degree to which quantity
demanded responds to this price increase depends on the A) price elasticity of demand.
B) the price elasticity of supply.
C) income elasticity of demand.
D) cross elasticity of demand.
Answer: A
Topic: Price Elasticity of Demand
Skill: Analytical
Status: Old
AACSB: Analytical Skills
2) The price elasticity of demand measures
A) how often the price of a good changes.
B) the slope of a budget curve.
C) how sensitive the quantity demanded is to changes in demand.
D) the responsiveness of the quantity demanded to changes in price.
Answer: D
Topic: Price Elasticity of Demand
Skill: Definition
Status: Old
AACSB: Analytical Skills
3) Elasticity measures the A)
percentage change in a variable.
B) slope of a curve.
C) change in a variable.
D) responsiveness of a variable to a change in another variable.
Answer: D
Topic: Price Elasticity of Demand
Skill: Definition
Status: Old
AACSB: Analytical Skills
4) The price elasticity of demand for purses is measured in what units?
A) dollars
B) purses
C) dollars per purse
D) The price elasticity of demand is a unitless measure.
Answer: D
Topic: Price Elasticity of Demand
Skill: Recognition
Status: Revised
1
Copyright © 2014 Pearson Education, Inc.
,AACSB: Analytical Skills
5) The price elasticity of demand is defined as the magnitude of the
A) change in quantity demanded divided by the change in price.
B) change in price divided by the change in quantity demanded.
C) percentage change in quantity demanded divided by the percentage change in price.
D) percentage change in price divided by the percentage change in quantity demanded.
Answer: C
Topic: Price Elasticity of Demand
Skill: Definition
Status: Old
AACSB: Analytical Skills
6) The price elasticity of demand is calculated as the absolute value of the
A) percentage change in quantity demanded divided by the percentage change in price.
B) percentage change in price divided by the percentage change in quantity demanded.
C) change in quantity demanded divided by the change in price.
D) change in price divided by the change in quantity demanded.
Answer: A
Topic: Price Elasticity of Demand
Skill: Definition
Status: Old
AACSB: Analytical Skills
7) The price elasticity of demand equals magnitude of the
A) change in the price divided by the change in quantity demanded.
B) change in the quantity demanded divided by the change in price.
C) percentage change in the price divided by the percentage change in the quantity demanded.
D) percentage change in the quantity demanded divided by the percentage change in the price.
Answer: D
Topic: Calculating Elasticity
Skill: Definition
Status: Old
AACSB: Analytical Skills
8) The price elasticity of demand is equal to the ________ in the ________ divided by the ________ in
the ________.
A) percentage change; price; percentage change; quantity demanded
B) change; price; change; quantity demanded
C) percentage change; quantity demanded; percentage change; price
D) change; quantity demanded; change; price
Answer: C
Topic: Price Elasticity of Demand
Skill: Definition
Status: Old
AACSB: Analytical Skills
9) The price elasticity of demand depends on
A) the units used to measure price and the units used to measure quantity.
2
Copyright © 2014 Pearson Education, Inc.
,B) the units used to measure price but not the units used to measure quantity.
C) the units used to measure quantity but not the units used to measure price.
D) neither the units used to measure price nor the units used to measure quantity.
Answer: D
Topic: Price Elasticity of Demand
Skill: Conceptual
Status: Old
AACSB: Analytical Skills
10) When the quantity of coal is measured in kilograms instead of pounds, the demand for coal becomes
A) more elastic.
B) less elastic.
C) neither more nor less elastic.
D) undefined.
Answer: C
Topic: Calculating Elasticity
Skill: Conceptual
Status: Old
AACSB: Analytical Skills
11) The price elasticity of demand for oranges ________ change if the units of the quantity was changed
from pounds to kilograms and ________ change if the units of the price was changed from dollars to
cents.
A) would; would
B) would; would not
C) would not; would
D) would not; would notAnswer: D
Topic: Price Elasticity of Demand
Skill: Conceptual
Status: Old
AACSB: Analytical Skills
12) Suppose the quantity of gasoline is measured in gallons and the price of gasoline is measured in
dollars. The price elasticity of demand is 0.67. If the price of gasoline was now measured in cents
rather than dollars, the price elasticity of demand would now be A) 0.0067.
B) 0.67.
C) 6.7.
D) 67.0.
Answer: B
Topic: Price Elasticity of Demand
Skill: Analytical
Status: Old
AACSB: Analytical Skills
13) A decrease in the price of eggs from $1.50 to $1.30 per dozen resulted in an increase in egg
purchases in two cities. In Philadelphia, daily egg purchases increased from 6000 to 8000 dozens; in
nearby Dover, Delaware, daily egg purchases increased from 300 to 400 dozens. The price elasticity of
demand is therefore
A) lower in the smaller city as would be expected.
3
Copyright © 2014 Pearson Education, Inc.
, B) greater in the smaller city as would be expected.
C) certainly affected by population differences in different markets.
D) the same in Philadelphia as in Dover.
Answer: D
Topic: Calculating Elasticity
Skill: Analytical
Status: Old
AACSB: Analytical Skills
14) Dan sells newspapers. Dan says that a 4 percent increase in the price of a newspaper will decrease
the quantity of newspapers demanded by 8 percent. According to Dan, the demand for newspapers is
________.
A) inelastic
B) unit elastic
C) perfectly elastic
D) elastic
Answer: D
Topic: Calculating Elasticity
Skill: Analytical
Status: Old
AACSB: Analytical Skills
15) The price elasticity of demand for furniture is estimated at 1.3. This value means a one percent
increase in the
A) price of furniture will increase the quantity of furniture demanded by 1.3 percent.
B) price of furniture will decrease the quantity of furniture demanded by 1.3 percent.
C) quantity of furniture demanded will decrease the price of furniture by 1.3 percent.
D) quantity of furniture demanded will increase the price of furniture by 1.3 percent.
Answer: B
Topic: Calculating Elasticity
Skill: Analytical
Status: Old
AACSB: Analytical Skills
16) The price elasticity of demand for oil is estimated at 0.05. This value means a 10 percent increase in
the
A) quantity of oil demanded will result from a 0.5 percent increase in the price of oil.
B) quantity of oil demanded will result from a 0.5 percent decrease in the price of oil.
C) price of oil will increase the quantity of oil demanded by 0.5 percent.
D) price of oil will decrease the quantity of oil demanded by 0.5 percent.
Answer: D
Topic: Calculating Elasticity
Skill: Analytical
Status: Old
AACSB: Analytical Skills
17) If a 6 percent decrease in the price leads to a 5 percent increase in the quantity demanded, the
price elasticity of demand is A) 0.30.
4
Copyright © 2014 Pearson Education, Inc.
2026/2027)
1 Price Elasticity of Demand
1) Suppose the price of burgers increases from $2 to $3 each. The degree to which quantity
demanded responds to this price increase depends on the A) price elasticity of demand.
B) the price elasticity of supply.
C) income elasticity of demand.
D) cross elasticity of demand.
Answer: A
Topic: Price Elasticity of Demand
Skill: Analytical
Status: Old
AACSB: Analytical Skills
2) The price elasticity of demand measures
A) how often the price of a good changes.
B) the slope of a budget curve.
C) how sensitive the quantity demanded is to changes in demand.
D) the responsiveness of the quantity demanded to changes in price.
Answer: D
Topic: Price Elasticity of Demand
Skill: Definition
Status: Old
AACSB: Analytical Skills
3) Elasticity measures the A)
percentage change in a variable.
B) slope of a curve.
C) change in a variable.
D) responsiveness of a variable to a change in another variable.
Answer: D
Topic: Price Elasticity of Demand
Skill: Definition
Status: Old
AACSB: Analytical Skills
4) The price elasticity of demand for purses is measured in what units?
A) dollars
B) purses
C) dollars per purse
D) The price elasticity of demand is a unitless measure.
Answer: D
Topic: Price Elasticity of Demand
Skill: Recognition
Status: Revised
1
Copyright © 2014 Pearson Education, Inc.
,AACSB: Analytical Skills
5) The price elasticity of demand is defined as the magnitude of the
A) change in quantity demanded divided by the change in price.
B) change in price divided by the change in quantity demanded.
C) percentage change in quantity demanded divided by the percentage change in price.
D) percentage change in price divided by the percentage change in quantity demanded.
Answer: C
Topic: Price Elasticity of Demand
Skill: Definition
Status: Old
AACSB: Analytical Skills
6) The price elasticity of demand is calculated as the absolute value of the
A) percentage change in quantity demanded divided by the percentage change in price.
B) percentage change in price divided by the percentage change in quantity demanded.
C) change in quantity demanded divided by the change in price.
D) change in price divided by the change in quantity demanded.
Answer: A
Topic: Price Elasticity of Demand
Skill: Definition
Status: Old
AACSB: Analytical Skills
7) The price elasticity of demand equals magnitude of the
A) change in the price divided by the change in quantity demanded.
B) change in the quantity demanded divided by the change in price.
C) percentage change in the price divided by the percentage change in the quantity demanded.
D) percentage change in the quantity demanded divided by the percentage change in the price.
Answer: D
Topic: Calculating Elasticity
Skill: Definition
Status: Old
AACSB: Analytical Skills
8) The price elasticity of demand is equal to the ________ in the ________ divided by the ________ in
the ________.
A) percentage change; price; percentage change; quantity demanded
B) change; price; change; quantity demanded
C) percentage change; quantity demanded; percentage change; price
D) change; quantity demanded; change; price
Answer: C
Topic: Price Elasticity of Demand
Skill: Definition
Status: Old
AACSB: Analytical Skills
9) The price elasticity of demand depends on
A) the units used to measure price and the units used to measure quantity.
2
Copyright © 2014 Pearson Education, Inc.
,B) the units used to measure price but not the units used to measure quantity.
C) the units used to measure quantity but not the units used to measure price.
D) neither the units used to measure price nor the units used to measure quantity.
Answer: D
Topic: Price Elasticity of Demand
Skill: Conceptual
Status: Old
AACSB: Analytical Skills
10) When the quantity of coal is measured in kilograms instead of pounds, the demand for coal becomes
A) more elastic.
B) less elastic.
C) neither more nor less elastic.
D) undefined.
Answer: C
Topic: Calculating Elasticity
Skill: Conceptual
Status: Old
AACSB: Analytical Skills
11) The price elasticity of demand for oranges ________ change if the units of the quantity was changed
from pounds to kilograms and ________ change if the units of the price was changed from dollars to
cents.
A) would; would
B) would; would not
C) would not; would
D) would not; would notAnswer: D
Topic: Price Elasticity of Demand
Skill: Conceptual
Status: Old
AACSB: Analytical Skills
12) Suppose the quantity of gasoline is measured in gallons and the price of gasoline is measured in
dollars. The price elasticity of demand is 0.67. If the price of gasoline was now measured in cents
rather than dollars, the price elasticity of demand would now be A) 0.0067.
B) 0.67.
C) 6.7.
D) 67.0.
Answer: B
Topic: Price Elasticity of Demand
Skill: Analytical
Status: Old
AACSB: Analytical Skills
13) A decrease in the price of eggs from $1.50 to $1.30 per dozen resulted in an increase in egg
purchases in two cities. In Philadelphia, daily egg purchases increased from 6000 to 8000 dozens; in
nearby Dover, Delaware, daily egg purchases increased from 300 to 400 dozens. The price elasticity of
demand is therefore
A) lower in the smaller city as would be expected.
3
Copyright © 2014 Pearson Education, Inc.
, B) greater in the smaller city as would be expected.
C) certainly affected by population differences in different markets.
D) the same in Philadelphia as in Dover.
Answer: D
Topic: Calculating Elasticity
Skill: Analytical
Status: Old
AACSB: Analytical Skills
14) Dan sells newspapers. Dan says that a 4 percent increase in the price of a newspaper will decrease
the quantity of newspapers demanded by 8 percent. According to Dan, the demand for newspapers is
________.
A) inelastic
B) unit elastic
C) perfectly elastic
D) elastic
Answer: D
Topic: Calculating Elasticity
Skill: Analytical
Status: Old
AACSB: Analytical Skills
15) The price elasticity of demand for furniture is estimated at 1.3. This value means a one percent
increase in the
A) price of furniture will increase the quantity of furniture demanded by 1.3 percent.
B) price of furniture will decrease the quantity of furniture demanded by 1.3 percent.
C) quantity of furniture demanded will decrease the price of furniture by 1.3 percent.
D) quantity of furniture demanded will increase the price of furniture by 1.3 percent.
Answer: B
Topic: Calculating Elasticity
Skill: Analytical
Status: Old
AACSB: Analytical Skills
16) The price elasticity of demand for oil is estimated at 0.05. This value means a 10 percent increase in
the
A) quantity of oil demanded will result from a 0.5 percent increase in the price of oil.
B) quantity of oil demanded will result from a 0.5 percent decrease in the price of oil.
C) price of oil will increase the quantity of oil demanded by 0.5 percent.
D) price of oil will decrease the quantity of oil demanded by 0.5 percent.
Answer: D
Topic: Calculating Elasticity
Skill: Analytical
Status: Old
AACSB: Analytical Skills
17) If a 6 percent decrease in the price leads to a 5 percent increase in the quantity demanded, the
price elasticity of demand is A) 0.30.
4
Copyright © 2014 Pearson Education, Inc.
