ECO 2023 Exam 2 Practice Questions
and Answers Graded A+
If the price elasticity of demand for a good at the current price is E= -0.75, then a: -
ANSWER-1 percent increase in price will lead to a 0.75 percent decrease in quantity
demanded
AND 10 percent increase in price will lead to a 7.5 percent decrease in quantity
demanded
It is reasonable to expect: - ANSWER-the demand for Wawa or Racetrack brand
gasoline be more elastic than the demand for gasoline in general
Which of the following is correct? - ANSWER-if the demand for a product is inelastic at a
given price, a change in price will cause total revenue to change in the same direction
Consider a perfectly competitive market described by the demand function P = 60 -
0.3Q and supply functionP = 10 + 0.2Q. Using the standard formula (versus the mid-
point formula) for calculating elasticities, it may beconcluded that at the equilibrium price
and quantity: - ANSWER-E= -1 and E= 1.5
Suppose the market demand for a good is described by the demand function P = 80/Q.
It follows that the totalrevenue function relating the total revenues (TR) to the quantity
sold (Q) is: - ANSWER-TR = 80
A local theme park has estimated that in order to increase revenues generated from
ticket sales it must reduceticket prices. It follows that the theme park has estimated the
demand for visits to the park to be: - ANSWER-elastic
If a firm finds that it can generate $10,000 of revenue when the price of the good its
sells is $6 per unit and $8,000of revenue when the price of the good it sells is $5 per
unit, then:i. the demand for the good will be greater at the lower price than the higher
price ii. the demand for the good is elastic in the $5-$6 price range iii. the demand for
the good is inelastic in the $5-$6 price range iv. the demand for the good is unit elastic
in the $5-$6 price range - ANSWER-iii
It takes several months or years for the supply of housing to increase within a housing
market (e.g., centralFlorida). It follows that: - ANSWER-the short-run supply curve for
housing is less elastic than the long-run supply curve for housing
If household income increases and the quantity of a good it purchases increases as a
result, then: - ANSWER-the elasticity of income is positive, indicating the good is normal
This study source was downloaded by 100000861562950 from CourseHero.com on 02-16-2023 12:44:15 GMT -06:00
https://www.coursehero.com/file/186324649/ECO-2023-Exam-2-Practice-Questions-and-Answers-Graded-Adocx/
and Answers Graded A+
If the price elasticity of demand for a good at the current price is E= -0.75, then a: -
ANSWER-1 percent increase in price will lead to a 0.75 percent decrease in quantity
demanded
AND 10 percent increase in price will lead to a 7.5 percent decrease in quantity
demanded
It is reasonable to expect: - ANSWER-the demand for Wawa or Racetrack brand
gasoline be more elastic than the demand for gasoline in general
Which of the following is correct? - ANSWER-if the demand for a product is inelastic at a
given price, a change in price will cause total revenue to change in the same direction
Consider a perfectly competitive market described by the demand function P = 60 -
0.3Q and supply functionP = 10 + 0.2Q. Using the standard formula (versus the mid-
point formula) for calculating elasticities, it may beconcluded that at the equilibrium price
and quantity: - ANSWER-E= -1 and E= 1.5
Suppose the market demand for a good is described by the demand function P = 80/Q.
It follows that the totalrevenue function relating the total revenues (TR) to the quantity
sold (Q) is: - ANSWER-TR = 80
A local theme park has estimated that in order to increase revenues generated from
ticket sales it must reduceticket prices. It follows that the theme park has estimated the
demand for visits to the park to be: - ANSWER-elastic
If a firm finds that it can generate $10,000 of revenue when the price of the good its
sells is $6 per unit and $8,000of revenue when the price of the good it sells is $5 per
unit, then:i. the demand for the good will be greater at the lower price than the higher
price ii. the demand for the good is elastic in the $5-$6 price range iii. the demand for
the good is inelastic in the $5-$6 price range iv. the demand for the good is unit elastic
in the $5-$6 price range - ANSWER-iii
It takes several months or years for the supply of housing to increase within a housing
market (e.g., centralFlorida). It follows that: - ANSWER-the short-run supply curve for
housing is less elastic than the long-run supply curve for housing
If household income increases and the quantity of a good it purchases increases as a
result, then: - ANSWER-the elasticity of income is positive, indicating the good is normal
This study source was downloaded by 100000861562950 from CourseHero.com on 02-16-2023 12:44:15 GMT -06:00
https://www.coursehero.com/file/186324649/ECO-2023-Exam-2-Practice-Questions-and-Answers-Graded-Adocx/
