Test Bank for Economics Today The Micro View 18th Edition Miller All Chapters Included

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Miller


Economics Today, 18e (Miller)
Chapter 19 Demand and Supply Elasticity

19.1 Price Elasticity

1) The price elasticity of demand is a measure of
A) the responsiveness of the quantity demanded of a good to a changes in the price of the good.
B) the quantity demanded of a good at a given price.
C) the demand for a product holding prices constant.
D) the horizontal shift in the demand curve when the price of a good changes.
Answer: A
Diff: 1
Topic: 19.1 Price Elasticity
Learning Outcome: Micro-6: Explain the fundamentals of the elasticity of supply and demand
and the applications of both
AACSB: Analytical thinking

2) Suppose that when the price of milk rises 10%, the quantity demanded of milk falls 2%. Based
on this information, what is the approximate absolute price elasticity of demand for milk?
A) 5.0
B) 0.2
C) 0.5
D) 2.0
Answer: B
Diff: 1
Topic: 19.1 Price Elasticity
Learning Outcome: Micro-6: Explain the fundamentals of the elasticity of supply and demand
and the applications of both
AACSB: Application of knowledge

3) The price elasticity of demand measures
A) the consumers' sensitivity to a price change.
B) the producers' sensitivity to a price change.
C) how much the market price changes in response to a change in demand.
D) how much the demand changes in response to a change in income.
Answer: A
Diff: 1
Topic: 19.1 Price Elasticity
Learning Outcome: Micro-6: Explain the fundamentals of the elasticity of supply and demand
and the applications of both
AACSB: Analytical thinking




1
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,DOWNLOAD THE Test Bank for Economics Today The Micro View 18th Edition
Miller


4) A good's price elasticity of demand can be calculated by using the formula of
A) percentage change in price divided by percentage change in quantity demanded.
B) percentage change in quantity demanded divided by percentage change in price.
C) percentage change in price divided by percentage change in income.
D) absolute change in quantity demanded divided by absolute change in price.
Answer: B
Diff: 1
Topic: 19.1 Price Elasticity
Learning Outcome: Micro-6: Explain the fundamentals of the elasticity of supply and demand
and the applications of both
AACSB: Analytical thinking

5) Which of the following statements about demand and price elasticity of demand is TRUE?
A) As the demand curve has a positive slope, the price elasticity of demand is positive.
B) As the demand curve has a negative slope, the price elasticity of demand is negative.
C) As the demand curve has a positive slope, the price elasticity of demand is negative.
D) As the demand curve has a negative slope, the price elasticity of demand is positive.
Answer: B
Diff: 1
Topic: 19.1 Price Elasticity
Learning Outcome: Micro-6: Explain the fundamentals of the elasticity of supply and demand
and the applications of both
AACSB: Analytical thinking

6) The price elasticity of demand shows
A) the relationship between market price and household income.
B) the proportionate amount by which the quantity demanded changes in response to a
proportionate change in price.
C) the quantity demanded at a given price.
D) the proportionate amount by which the price changes in response to a proportionate change in
quantity demanded.
Answer: B
Diff: 2
Topic: 19.1 Price Elasticity
Learning Outcome: Micro-6: Explain the fundamentals of the elasticity of supply and demand
and the applications of both
AACSB: Analytical thinking




2
Copyright © 2016 Pearson Education, Inc.
mynursytest.store

, DOWNLOAD THE Test Bank for Economics Today The Micro View 18th Edition
Miller


7) The price elasticity of demand is
A) always positive, so there is no reason to consider the absolute value of the price elasticity of
demand.
B) always negative, but by convention, economists typically express the price elasticity of
demand as an absolute value.
C) always equal to -1, which by convention economists typically express as an absolute value, or
1.
D) always equal to zero, so there is no reason to consider the absolute value of the price elasticity
of demand.
Answer: B
Diff: 1
Topic: 19.1 Price Elasticity
Learning Outcome: Micro-6: Explain the fundamentals of the elasticity of supply and demand
and the applications of both
AACSB: Analytical thinking

8) If the absolute price elasticity of demand for good Y is 0.5, when there is a 20 percent increase
in price, we can conclude that quantity demanded
A) has fallen by 100 percent.
B) has fallen by 1 percent.
C) has fallen by 10 percent.
D) has fallen by 4 percent.
Answer: C
Diff: 1
Topic: 19.1 Price Elasticity
Learning Outcome: Micro-6: Explain the fundamentals of the elasticity of supply and demand
and the applications of both
AACSB: Application of knowledge

9) When economists want to obtain a measure of the responsiveness of quantity demanded to
changes in price, they use
A) the slope of the demand curve.
B) the price elasticity of demand.
C) only the percentage change in quantity demanded.
D) the cross-price elasticity of demand.
Answer: B
Diff: 1
Topic: 19.1 Price Elasticity
Learning Outcome: Micro-6: Explain the fundamentals of the elasticity of supply and demand
and the applications of both
AACSB: Analytical thinking




3
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