WorksheetsDemand and Supply with Elasticities (PED + PES)
Total questions: 10
Worksheet time: 14mins
Which of the following will not cause the demand for product K to change?
a) A change in the price of close-substitute product J.
b) An increase in consumer incomes.
c) A change in consumer tastes.
d) A change in the price of K.
Due to the unusually cold weather, the supply of oranges has substantially decreased. This statement indicates that
a) the demand for oranges will necessarily rise.
b) the equilibrium quantity of oranges will rise.
c) the amount of oranges that will be available at various prices has declined.
d) the price of oranges will fall.
If the demand for a good increases when there is high unemployment, it is likely that the good is
a) an inferior good.
b) a normal good.
c) a luxury good.
d) a good with many substitutes
Coffee and sugar are complements. If the supply curve of coffee shifts leftward because of poor weather, then there will be
a) an increase in the price of sugar.
b) a decrease in the price of sugar.
c) a leftward shift of the demand curve for coffee.
d) a leftward shift of the supply curve for sugar.
If the price of aluminum used to make bicycles increases, the price of a bicycle rises because of a
a) rightward shift of the demand curve for bicycles.
b) rightward shift of the supply curve of bicycles.
c) leftward shift of the demand curve for bicycles.
d) leftward shift of the supply curve of bicycles.
A decrease in the demand for cigarettes due the changes in consumer tastes, accompanied by an increase in supply due to advances in tobacco farming, will result in:
a) a decrease in the equilibrium quantity and an indeterminate change in equilibrium price
b) a decrease in the equilibrium quantity and price.
c) a decrease in the equilibrium price and an indeterminate change in equilibrium quantity.
d) a decrease in the equilibrium price and an increase in the equilibrium quantity.
Suppose you are an economist with SBS Transit, and the company wishes to increase revenues. If the price elasticity of demand for public transportation is 0.54, a reasonable strategy would be to
a) lower bus fares since the number of riders will increase.
b) leave bus fares as they are since quantity demanded is not very responsive to price.
c) raise bus fares.
d) have a smaller bus fleet since demand for bus rides is inelastic.
The owner of the Orange Julius stand along Orchard Road estimated that if he lowers the price of hot dogs from $2.00 to $1.50, he will increase sales from 400 to 450 hot dogs per day. Using the point elasticity formula (and the initial price and quantity), we can tell that the demand for hot dogs is
a) elastic.
b) inelastic.
c) unitary elastic.
d) perfectly price elastic.
Supply curves tend to be
a) perfectly elastic in the long run because consumer demand will have sufficient time to adjust fully to changes in supply.
b) more elastic in the long run because there is time for firms to acquire more factor inputs and better technology.
c) perfectly inelastic in the long run because the law of scarcity imposes absolute limits on production.
d) less elastic in the long run because there is time for firms to enter or leave an industry.
When the demand of vegetables increases, the equilibrium price _______, causing a _______ in equilibrium quantity as _______ of vegetables is price ______.
decrease, more than proportionate decrease, demand, elastic
increases, less than proportionate increase, supply, inelastic
Increases, less than proportionate increase, demand, inelastic
Increases, more than proportionate increase, supply, elastic
