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CHAP 2 SS &Elas OCT 23 19/11/ GRP a

Total questions: 81

Worksheet time: 50mins

Name
Class
Date
1.
A decrease in the price of a good will
a)
increase supply.
b)
decrease supply.
c)
increase quantity supplied.
d)
decrease quantity supplied.
2.
Which way does a supply curve slope?
a)
down
b)
up
c)
both
d)
neither
3.
Which graph below shows the SUPPLY CURVE?
a)
A
b)
B
c)
C
d)
D
4.
This part of the market determines SUPPLY
a)
buyers
b)
sellers
c)
consumers
d)
us
5.
The diagram represents a(n)
a)
increase in supply
b)
decrease in supply
c)
change in quantity supplied
d)
none of the above
6.
How many cup holders are producers willing to supply at a price of $2.50?
a)
3,000
b)
4,000
c)
5,000
d)
7,000
7.
The Law of Supply states:
a)
as price increases, supply increases
b)
as prices decrease, supply increases
8.
How Many cup holders are producers willing to supply at a price of $3.00?
a)
3,000
b)
4,000
c)
5,000
d)
7,000
9.
What does this curve represent?
a)
demand
b)
supply
c)
equilibrium
d)
shortage
10.

When producers offer more of a good as its price increases and less as its price falls, this defines the

a)

law of demand

b)

law of supply

c)

change in demand

d)

change in supply

11.

When producers offer more of a good as its price increases and less as its price falls, this defines the

a)

law of demand

b)

law of supply

c)

change in demand

d)

change in supply

12.

The willingness and ability of a producer to make a product is referred to as

a)

quantity supplied

b)

quantity demanded

c)

supply

d)

demand

13.

Movement along a supply curve demonstrates

a)

a change in quantity supplied

b)

a change in quantity demanded

c)

a change in supply

d)

a change in demand

14.

A shift in a supply curve demonstrates

a)

a change in quantity supplied

b)

a change in quantity demanded

c)

a change in supply

d)

a change in demand

15.

A shift in a supply curve demonstrates

a)

a change in quantity supplied

b)

a change in quantity demanded

c)

a change in supply

d)

a change in demand

16.

Which of these demonstrates an example of a supply curve? (More than one answer)

a)
b)
c)
d)
17.

Which of the following supply curves demonstrates a decrease in the quantity supplied?

a)
b)
c)
d)
18.

A decrease in supply is demonstrated by which of the following?

a)
b)
c)
d)
19.

The prices for houses steadily increase, causing more people to want to sell their homes. Which of these demonstrates this concept?

a)
b)
c)
d)
20.

A popular musical act announces a concert at a 10,000 seat venue. Prices for tickets skyrocket so the venue announces that there will be 500 standing room only tickets offered. What concept does this demonstrate?

a)

elastic supply

b)

inelastic supply

c)

change in supply

d)

change in quantity supplied

21.

When producers offer more of a good as its price increases and less as its price falls, this defines the

a)

law of demand

b)

law of supply

c)

change in demand

d)

change in supply

22.

The willingness and ability of a producer to make a product is referred to as

a)

quantity supplied

b)

quantity demanded

c)

supply

d)

demand

23.

Movement along a supply curve demonstrates

a)

a change in quantity supplied

b)

a change in quantity demanded

c)

a change in supply

d)

a change in demand

24.

A shift in a supply curve demonstrates

a)

a change in quantity supplied

b)

a change in quantity demanded

c)

a change in supply

d)

a change in demand

25.

Which of the following supply curves demonstrates a decrease in the quantity supplied?

a)
b)
c)
d)
26.

A decrease in supply is demonstrated by which of the following?

a)
b)
c)
d)
27.

A hurricane wipes out an orange crop in Florida, sharply affecting the supply of oranges. Which chart demonstrates this concept?

a)
b)
c)
d)
28.

The prices for houses steadily increase, causing more people to want to sell their homes. Which of these demonstrates this concept?

a)
b)
c)
d)
29.
A decrease in the price of a good will
a)
increase supply.
b)
decrease supply.
c)
increase quantity supplied.
d)
decrease quantity supplied.
30.
Which way does a supply curve slope?
a)
down
b)
up
c)
both
d)
neither
31.
This part of the market determines SUPPLY
a)
buyers
b)
sellers
c)
consumers
d)
us
32.
The Law of Supply states:
a)
as price increases, supply increases
b)
as prices decrease, supply increases
33.
Which of the following would not shift the supply curve for iphones?
a)
an increase in the price of iphones
b)
a decrease in the number of sellers of iphone
c)
an increase in the price of plastic, an input into the production of iphones
d)
an improvement in the technology used to produce iphones
34.
New technology advances the rate at which furniture can be assembled. Why does this change the supply?
a)
Change in cost of production
b)
Changes in number of producers
c)
Changes in expectations
35.

Which of the following leads to an decrease in supply?

a)

an increase in the cost of raw materials

b)

diminishing marginal returns

c)

a decrease in the cost of raw materials

d)

a change in the law of supply

36.

Which of these do the producers of an item hope to achieve when adopting new technology?

a)

a shift of the supply curve for that item to the left

b)

repeal of the subsidy for that item

c)

inelasticity of supply of that item

d)

a shift of the supply curve for that item to the right

37.

What affect do excise taxes on production usually have on the supply curve?

a)

decreases supply, supply curve shifts left

b)

increases supply, supply curve shifts left

c)

decreases supply, supply curve shifts right

d)

increases supply, supply curve shifts right

38.

Which of the following leads to an increase in supply?

a)

Gallery Furniture will raise prices on all wood furniture

b)

six new companies begin producing smart phones

c)

price of a complementary good goes down

d)

increased cyclical employment

39.

If I make Jordans for $50 and sell them for $100. I will make $50. This is an example of...

a)

quantity supplied

b)

demand

c)

supply

d)

profit

40.

Which of these would most likely increase the

supply of soccer balls?

a)

a transportation strike

b)

a government excise tax

c)

a decrease in the price of raw materials

d)

an increase in the supply of tennis balls

41.
Demand is unit elastic if it is less than 1.0
a)
True
b)
False
42.
If the price on a product goes up the quantity demanded will go down. This follows the economic theory of:
a)
Law of Demand
b)
elasticity
c)
income effect
d)
None of the above
43.
The formula for calculating elasticity of demand is:
a)
The % change in price over the % change in quantity demanded
b)
The % change in quantity demanded over the % change in price
c)
The change in price over the change in quantity demaned
d)
The change in quantity demanded over the change in price
44.
The elasticity of demand for tissues is 0.66. This means the demand for tissues is
a)
elastic
b)
unit elastic
c)
inelastic
d)
really expensive
45.
which of the following is not a determinant of demand elasticity?
a)
availability of substitutes
b)
share of consumer's budget spend on good
c)
duration of adjustment period
d)
government spending
46.

What does it mean?

Ed = 0

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

47.

What does it mean?

Ed = 1

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

48.

What does it mean?

Ed = ∞

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

49.

What does it mean?

Ed > 1

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

50.

What does it mean?

Ed < 1

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

51.

What does it mean?

% change in Qd = % change in P

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

52.

Describe your demand for a product if you buy the same amount of it or just a small amount less after a large price increase.

a)

elastic

b)

unitary elastic

c)

inelastic

d)

hyperelastic

53.

Define Income Elasticity of Demand

a)

YED measures the degree of responsiveness of quantity demanded for a good to a change in consumer's income, ceteris paribus

b)

YED measures the degree of responsiveness of demand for a good to a change in consumer's income, ceteris paribus

c)

YED measures the degree of responsiveness of consumer's income to a change in quantity demanded for a good, ceteris paribus

d)

YED measures the degree of responsiveness of consumer's income to a change in demand for a good, ceteris paribus

54.
Consumers demand more of this type of good when their income rises.
a)
Normal good
b)
Inferior good
c)
Elastic good
d)
Substitution good
55.

If the income elasticity of market demand is negative, most consumers view the good as:

a)

a luxury good

b)

having many imperfect substitutes.

c)

an inferior good.

d)

a normal good.

56.

Which one is the correct formula for Income Elasticity of demand?

a)

Percentage change in income / Percentage change in quantity demand for a good

b)

Percentage change in quantity demand for a good / Percentage change in income

c)

Percentage change in supplied for a good / Percentage change in income

d)

Percentage change in quantity demand for a good / Percentage change in its price

57.

YED = 0 is referring to

a)

Normal Goods

b)

Inferior Goods

c)

Luxury Goods

d)

Necessity Goods

58.

When YED value is positive and the value is 0.5

a)

Normal Good

b)

Inferior Good

c)

Luxury Good

d)

Necessity Goods

59.

How many categories of YED exits?

a)

Five

b)

Three

c)

One

d)

Four

60.

Income elasticity is can be measured by

a)

comparing the percentage change in demanded with the percentage change in income

b)

comparing the percentage change in quantity demanded with the percentage change in price

c)

comparing the percentage change in quantity demanded with the percentage change in income

d)

comparing the percentage change in quantity supply with the percentage change in income

61.

The cross elasticity of demand for substitutes will always be negative because the when the price of product A increases the quantity demanded of product B also increases

a)

TRUE

b)

FALSE

62.

If the cross-price elasticity between two commodities is 1.5,

a)

the two goods are luxury goods.

b)

the two goods are complements.

c)

the two goods are substitutes.

d)

the two goods are normal goods.

63.

It is reasonable to expect the cross price elasticity of demand for golf clubs and golf balls to be positive

a)

True

b)

False

c)

Uncertain

64.

If two goods have negative price cross‑elasticities of demand, the goods are:

a)

inferior goods.

b)

luxury goods.

c)

complementary goods:

d)

substitute goods.

65.

The cross elasticity of demand for substitutes will always be negative because the when the price of product A increases the quantity demanded of product B also increases

a)

TRUE

b)

FALSE

66.

1. A 5% rise the price of beef decreased quantity of beef demanded by 10% and increase the quantity demanded of chicken by 15%

(i) Calculate the cross elasticity of demand between beef and chicken

a)

1/3

b)

3

c)

2

d)

1/2

67.

If the cross elasticity of demand for product A is zero then product A and Product B are complements

a)

TRUE

b)

FALSE

68.

If the cross-price elasticity between two commodities is 1.5,

a)

the two goods are luxury goods.

b)

the two goods are complements.

c)

the two goods are substitutes.

d)

the two goods are normal goods.

69.

It is reasonable to expect the cross price elasticity of demand for golf clubs and golf balls to be positive

a)

True

b)

False

c)

Uncertain

70.

Why does demand generally become more elastic over time?

a)

People don't change their shopping behavior over time.

b)

Few substitutes become available.

c)

People buy more products over time.

d)

People have time to find substitutes and change behaviors.

71.

If two goods have negative price cross‑elasticities of demand, the goods are:

a)

inferior goods.

b)

luxury goods.

c)

complementary goods:

d)

substitute goods.

72.

A 2% price cut for GOOD A causes GOOD B sales to fall by 3%. The price cross elasticity of demand between these goods is roughly _____ and these goods are _____.

a)

‑2/3, substitutes.

b)

1.5, substitutes.

c)

2/3, complements.

d)

‑1.5, complements.

73.

What is the relationship between two good if Ex = -2

a)

Substitutes

b)

No relationship

c)

Complements

74.

Complementary goods have:

a)

the same elasticities of demand.

b)

very low price elasticities of demand.

c)

negative cross price elasticities of demand with respect to each other.

d)

positive cross elasticities of demand.with respect to each other

75.

What does cross elasticity measure?

a)

Measures responsiveness of changes in quantity demanded to changes in price.

b)

Measures the responsiveness of the quantity demanded of

a good or service to a change in income.

c)

Measures the responsiveness of the quantity demanded of one good to changes in price of another good.

76.

What is the relationship between two good if Ex = -2

a)

Substitutes

b)

No relationship

c)

Complements

77.

Complementary goods have:

a)

the same elasticities of demand.

b)

very low price elasticities of demand.

c)

negative cross price elasticities of demand with respect to each other.

d)

positive cross elasticities of demand.with respect to each other

78.

What does cross elasticity measure?

a)

Measures responsiveness of changes in quantity demanded to changes in price.

b)

Measures the responsiveness of the quantity demanded of

a good or service to a change in income.

c)

Measures the responsiveness of the quantity demanded of one good to changes in price of another good.

79.

Price elasticity of supply is the responsiveness of

a)

demand to a change in price.

b)

price to a change in supply.

c)

quantity supplied to a change in price.

d)

price to a change in supply.

80.

If the supply curve of a product is vertical, PES is equal to

a)

0.

b)

1.

c)

-1.

d)

infinity.

81.

If the price elasticity of supply for a good is 10, then supply is

a)

elastic

b)

inelastic

c)

perfectly inelastic

d)

perfectly elastic

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