ECON LESSON 1 MID

Question 1

is a measure of the
responsiveness of quantity demanded to changes in price.

Answer 1

Price elasticity of demand

Question 2

Formula for coefficient of price elasticity of demand

Answer 2

Ed = Percentage in quantity demanded/ Percentage change in price

Question 3

Quantity demanded changes proportionately more than price changes. OR Ed 1>

Answer 3

Elastic

Question 4

Quantity demanded changes proportionately less than price changes OR Ed 1<

Answer 4

Inelastic

Question 5

Quantity demanded changes proportionately to price changes OR Ed 1=

Answer 5

Unit elastic

Question 6

Quantity demanded extremely responsive to even every small changes

Answer 6

Perfectly elastic

Question 7

Quantity demanded does not change as prices change

Answer 7

Perfectly Inelastic

Question 8

a seller is equal to the price of a good times the quantity of the
good sold.

Answer 8

Total revenue

Question 9

The elasticity of demand is not same the relationship between
Price and quantity and so will also have implications for
revenue. T OR F

Answer 9

FALSE (SAME)

Question 10

In law of supply and demand, price is inversely
proportional to quantity demanded. (downward slope)
T OR F?

Answer 10

TRUE

Question 11

Price and total revenue are inversely related

Answer 11

Elastic Demand and Total Revenue

Question 12

Price and total revenue are directly related

Answer 12

Inelastic Demand and Total Revenue

Question 13

A rise or fall in price will leave total revenue
unchanged.

Answer 13

Unit Elastic Demand and Total Revenue

Question 14

is a measure of the responsiveness
of quantity supplied to changes in price.

Answer 14

Price elasticity of supply

Question 15

Formula for coefficient of price elasticity of supply

Answer 15

Percentage in quantity supplied/Percentage change in price

Question 16

Toothpicks are Inelastic. T or F?

Answer 16

FALSE ( ELASTIC)

Question 17

Determinants of Elasticity of Supply

Answer 17

1. Change in Per-unit Costs with Increased
   Production
2. Time Horizon
3. Share of Market Inputs
4. Geographic Scope

Question 18

Immediately following a price increase producers can expand out their output using their current supply

Answer 18

Time Horizon

Question 19

Supply is more Inelastic when the industry is a small demander in its
input markets because supply can be expanded without causing a big increase in the demand for the industry’s inputs. TRUE OR FALSE?

Answer 19

FALSE (INELASTIC)

Question 20

The narrow the scope of the market of a good,
the more elastic its supply.

Answer 20

Geographic Scope

Question 21

Supply is inelastic when the industry is a big demander in its input
markets. T OR F

Answer 21

TRUE

Question 22

refers to a percentage change in quantity
supplied that is greater than the percentage change in price.

Answer 22

Elastic supply

Question 23

refers to a percentage change in
quantity supplied that is less than the percentage change in price.

Answer 23

Inelastic supply

Question 24

refers to a percentage change in
quantity supplied that is equal to the percentage change in price.

Answer 24

Unit Elastic supply

Question 25

a small change in price changes
the quantity supplied by an infinitely large amount

Answer 25

Perfectly Elastic supply

Question 26

a change in price brings no
change in quantity supplied

Answer 26

Perfectly inelastic supply

Question 27

Revenue rise as Price rises if
Demand is Inelastic. TRUE OR FALSE

Answer 27

TRUE