Microeconomy U3 Flashcards
(31 cards)
Price elasticity of supply is when the elasticity of either supply is greater than one, indicating a high responsiveness of quantity demanded or supplied to changes in price.
Select one:
a.
True
b.
False
b.
False
p.108,109
- The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price.
- An elastic demand or elastic supply is one in which the elasticity is greater than one, indicating a high responsiveness to changes in price.
Goods which people see as necessities have a more elastic demand.
Select one:
a.
True
b.
False
b.
False
What is another name for zero elasticity?
Select one:
a.
Perfect inelasticity
b.
Price elasticity
c.
None of the above
a.
Perfect inelasticity
p.113
Zero elasticity or perfect inelasticity, as Figure 5.5 depicts, refers to the extreme case in which a percentage change in price, no matter how large, results in zero change in quantity
Which elasticity is represented by a straight line?
Select one:
a.
Elastic
b.
Unitary
A _____is the percentage change in the quantity of savings divided by the percentage change in interest rates.
Select one:
a.
Elasticity of savings
b.
Inelastic supply
c.
Perfect elasticity
a.
Elasticity of savings
p.124
the elasticity of savings—that is, the percentage change in the quantity of savings
divided by the percentage change in interest rates—will describe the shape of the supply curve for financial capital
On the supply side of markets, producers of goods and services typically find it easier to expand production in the long term of several years rather than in the short run of a few months.
Select one:
a.
True
b.
False
a.
True
p.122
Inelasticity demand is when the elasticity of demand is greater than one, indicating a high responsiveness of quantity demanded or supplied to changes in price.
Select one:
a.
True
b.
False
b.
False
p.109
An elastic demand or elastic supply is one in which the elasticity is greater than one, indicating a high responsiveness to changes in price.
Substitute goods have negative cross-price elasticities of demand.
Select one:
a.
True
b.
False
b.
False
p.123
Substitute goods have positive cross-price elasticities of demand:
A higher level of income causes a demand curve to shift to the right for a normal good, which means that the income elasticity of demand is positive.
Select one:
a.
True
b.
False
a.
True
p.123
A higher level of income causes a demand curve to shift to the right for a normal good, which means that the income elasticity of demand is positive
The ratio between the percentage change in the quantity demanded (Qd) or supplied (Qs) and the corresponding percent change in price is a called .
Select one:
a.
Wage elasticity
b.
Unitary elasticity
c.
Price elasticity
c.
Price elasticity
p.108
Price elasticity is the ratio between the percentage change in the quantity demanded (Qd) or supplied
(Qs) and the corresponding percent change in price.
What is an example of an infinite elasticity product?
Select one:
a.
Book
b.
Bread
c.
All of the above
c.
All of the above
p.113
The concept of elasticity applies to any market, not just markets for goods and services.
Select one:
a.
True
b.
False
a.
True
p.124
The concept of elasticity applies to any market, not just markets for goods and services
Elasticities are often higher in the short run than in the long run.
Select one:
a.
True
b.
False
b.
False
An economics concept that measures responsiveness of one variable to changes in another variable is a called
Select one:
a.
Elasticity
b.
Elastic supply
c.
Elastic demand
a.
Elasticity
p.108
Elasticity is an economics concept that measures responsiveness of one variable to changes in another variable
Which elasticity can be described as not very responsive?
Select one:
a.
Elastic
b.
Unitary
c.
Inelastic
c.
Inelastic
p.120
When the demand is inelastic, consumers are not very responsive to price changes, and the quantity demanded reduces only modestly when the tax is introduced
Perfect inelasticity is a percentage change in price, no matter how large, results in zero change in quantity.
Select one:
a.
True
b.
False
a.
True
p.113
Zero elasticity or perfect inelasticity, as Figure 5.5 depicts, refers to the extreme case in which a percentage change
in price, no matter how large, results in zero change in quantity
If demand is more inelastic than supply, consumers bear less of the tax burden.
Select one:
a.
True
b.
False
b.
False
p.120
If demand is more inelastic than supply, consumers bear most of the tax burden
What is another name for infinite elasticity?
Select one:
a.
Price elasticity
b.
Unitary elasticity
c.
Perfect elasticity
c.
Perfect elasticity
A_____is when a given percent price change in price leads to an equal percentage change in quantity demanded or supplied.
Select one:
a.
Elastic demand
b.
Inelastic supply
c.
Constant unitary elasticity
b. Inelastic supply p.112 Infinite elasticity or perfect elasticity refers to the extreme case where either the quantity demanded (Qd) or supplied (Qs) changes by an infinite amount in response to any change in price at all
What is the definition of inelastic supply?
Select one:
a.
Percentage change in the quantity supplied divided by the percentage change in price.
b.
The highly inelastic case of demand or supply in which a percentage change in price, no matter how large, results in zero change in the quantity; vertical in appearance.
c.
When the elasticity of supply is less than one, indicating that a 1 percent increase in price paid to the firm will result in a less than 1 percent increase in production by the firm.
c.
When the elasticity of supply is less than one, indicating that a 1 percent increase in price paid to the firm will result in a less than 1 percent increase in production by the firm.
p/109
Elasticities that are less than one indicate low responsiveness to price changes and correspond to inelastic demand or inelastic supply
Elasticities that are less than one indicate low responsiveness to price changes and correspond to inelastic demand or inelastic supply.
Select one:
a.
True
b.
False
a.
True
p/109
Elasticities that are less than one indicate low responsiveness to price changes and correspond to inelastic demand or inelastic supply
If supply is more inelastic than demand, sellers bear most of the tax burden.
Select one:
a.
True
b.
False
a.
True
p.120
if supply is more inelastic than demand, sellers bear most of the tax burden
The name for this equation is: _________________ = (% change in Qd of good A) / (% change in price of good B)
Select one:
a.
Cross-price elasticity of demand
b.
Income elasticity of demand
c.
Price elasticity
a.
Cross-price elasticity of demand
p.123
The advantage of the Midpoint Method for Elasticity is that one obtains the same elasticity between two price points whether there is a price increase or decrease.
Select one:
a.
True
b.
False
a.
True
p.110
The advantage of the Midpoint Method for Elasticity is that one obtains the same elasticity between two price points whether there is a price increase or decrease.
