Chapter 5/Elasticity and Its Applications ? 181
77. When demand is perfectly inelastic, the price elasticity of demand
a. is zero and the demand curve is vertical. b. is zero and the demand curve is horizontal.
c. approaches infinity and the demand curve is vertical. d. approaches infinity and the demand curve is horizontal. ANS: A PTS: 1 DIF: 2 REF: 5-1 TOP: Perfectly inelastic demand MSC: Interpretive
78. A perfectly inelastic demand implies that buyers
a. decrease their purchases when the price rises.
b. purchase the same amount as before when the price rises or falls. c. increase their purchases only slightly when the price falls. d. respond substantially to an increase in price. ANS: B PTS: 1 DIF: 2 REF: 5-1 TOP: Perfectly inelastic demand MSC: Interpretive
79. Suppose demand is perfectly inelastic and the supply of the good in question decreases. As a result,
a. the equilibrium quantity decreases and the equilibrium price is unchanged. b. the equilibrium price increases and the equilibrium quantity is unchanged. c. the equilibrium quantity and the equilibrium price both are unchanged. d. buyers’ total expenditure on the good is unchanged. ANS: B PTS: 1 DIF: 2 REF: 5-1
TOP: Perfectly inelastic demand | Equilibrium price | Equilibrium quantity MSC: Applicative 80. Suppose demand is perfectly elastic and the supply of the good in question decreases. As a result,
a. the equilibrium quantity decreases and the equilibrium price is unchanged. b. the equilibrium price increases and the equilibrium quantity is unchanged. c. the equilibrium quantity and the equilibrium price both are unchanged. d. buyers’ total expenditure on the good is unchanged. ANS: A PTS: 1 DIF: 2 REF: 5-1
TOP: Perfectly elastic demand | Equilibrium price | Equilibrium quantity MSC: Applicative 81. Alice says that she would buy one banana split a day regardless of the price. If she is telling the truth,
a. Alice's demand for banana splits is perfectly inelastic. b. Alice's price elasticity of demand for banana splits is 1. c. Alice's income elasticity of demand for banana splits is 0. d. None of the above answers is correct. ANS: A PTS: 1 DIF: 2 REF: 5-1 TOP: Perfectly inelastic demand MSC: Interpretive
82. Jean-Paul says that he will spend exactly 75 cents a day on M&Ms, regardless of the price of M&Ms. Jean-Paul’s
demand for M&Ms is a. perfectly elastic. b. unit elastic.
c. perfectly inelastic.
d. None of the above answers is correct. ANS: B PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand MSC: Interpretive
182 ? Chapter 5/Elasticity and Its Applications
83. Which of the following expressions is valid for the price elasticity of demand?
?Q1?Q2?/???Q2?Q1?/2?? a. Price elasticity of demand =
?P1?P2?/?1?/2???P2?P?b. Price elasticity of demand = c. d.
?Q2?Q1?/???Q1?Q2?/2?? ?P2?P1?/?1?P2?/2???P??P1?P2?/?1?/2???P2?P? Price elasticity of demand =
?Q1?Q2?/???Q2?Q1?/2???P2?P1?/?1?P2?/2???P? Price elasticity of demand =
?Q2?Q1?/???Q1?Q2?/2??DIF: 2 REF: 5-1 MSC: Applicative
ANS: B PTS: 1
TOP: Price elasticity of demand
84. Which of the following expressions can be used to compute the price elasticity of demand?
Q2?Q1P?P2a. Price elasticity of demand = ?1?Q1?Q2?/2?P2?P1?/2b. Price elasticity of demand = c. Price elasticity of demand = d. Price elasticity of demand = ANS: C PTS: 1
TOP: Price elasticity of demand
?Q1?Q2?/2?P2?P1?/2 ??Q1?Q2?/2?P2?P1?/2Q2?Q1P?P2 ?1Q1?Q2P2?P1Q2?Q1P2?P1 ?Q1?Q2P?P12DIF: 3 REF: 5-1 MSC: Analytical
85. For which of the following goods would demand be most elastic?
a. clothing b. blue jeans
c. Tommy Hilfiger jeans
d. All three would have the same elasticity of demand since they are all related. ANS: C PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand MSC: Applicative
86. In any market, total revenue is calculated by taking the price of the good and
a. dividing it by the price elasticity of demand. b. multiplying it by the price elasticity of demand. c. multiplying it by the quantity of the good.
d. multiplying it by the quantity of the good and then subtracting the costs of production. ANS: C PTS: 1 DIF: 1 REF: 5-1 TOP: Total revenue MSC: Definitional
87. How does total revenue change as one moves downward and to the right along a linear demand curve?
a. It always increases. b. It always decreases.
c. It first increases, then decreases.
d. It is unaffected by a movement along the demand curve. ANS: C PTS: 1 DIF: 3 REF: 5-1 TOP: Total revenue | Demand curve MSC: Analytical
Chapter 5/Elasticity and Its Applications ? 183
88. On a downward-sloping linear demand curve, total revenue reaches its maximum value at the
a. midpoint of the demand curve. b. lower end of the demand curve. c. upper end of the demand curve.
d. It is impossible to tell without knowing prices and quantities demanded. ANS: A PTS: 1 DIF: 3 REF: 5-1 TOP: Total revenue | Demand curve MSC: Analytical
89. Suppose the point (Q = 2,000, P = $60) is the midpoint on a certain downward-sloping, linear demand curve. Then
a. an increase in price from $40 to $42 will increase total revenue.
b. a decrease in price from $61 to $59 will leave total revenue unchanged. c. the maximum value of total revenue is $120,000. d. All of the above are correct. ANS: D PTS: 1 DIF: 3 REF: 5-1 TOP: Total revenue | Demand curve MSC: Analytical 90. If the price elasticity of demand is 1.5, regardless of which two points on the demand curve are used to compute the
elasticity, then
a. demand is perfectly inelastic and the demand curve is vertical.
b. demand is elastic and the demand curve is a straight, downward-sloping line. c. demand is perfectly elastic and the demand curve is horizontal.
d. demand is elastic and the demand curve is something other than a straight, downward-sloping line. ANS: D PTS: 1 DIF: 3 REF: 5-1 TOP: Price elasticity of demand MSC: Applicative
Figure 5-3 91. Refer to Figure 5-3. If price falls within the A range of the demand curve we can expect total revenue to
a. increase. b. decrease. c. stay the same.
d. This determination cannot be made without further information. ANS: A PTS: 1 DIF: 2 REF: 5-1 TOP: Total revenue MSC: Applicative 92. Refer to Figure 5-3. If price falls within the C range of the demand curve we can expect total revenue to
a. increase. b. decrease. c. stay the same.
d. This determination cannot be made without further information. ANS: B PTS: 1 DIF: 2 REF: 5-1 TOP: Total revenue MSC: Applicative
184 ? Chapter 5/Elasticity and Its Applications
93. Refer to Figure 5-3. If price is originally within the C range of the demand curve and then it increases to a value
within the A range of the demand curve, we can expect total revenue to a. increase. b. decrease. c. stay the same.
d. This determination cannot be made without further information. ANS: D PTS: 1 DIF: 2 REF: 5-1 TOP: Total revenue MSC: Applicative
Figure 5-4 94. Refer to Figure 5-4. As price falls from PA to PB, which demand curve represents the most elastic demand?
a. D1 b. D2 c. D3
d. All of the above are equally elastic. ANS: A PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand MSC: Applicative
95. Refer to Figure 5-4. As price falls from PA to PB, we could use the three demand curves to calculate three different
values of the price elasticity of demand. Which of the three demand curves would produce the smallest elasticity? a. D1 b. D2 c. D3
d. All of the above are equally elastic. ANS: C PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand MSC: Applicative
96. When demand is inelastic, a decrease in price will cause
a. an increase in total revenue. b. a decrease in total revenue.
c. no change in total revenue, but an increase in quantity demanded. d. no change in total revenue, but a decrease in quantity demanded. ANS: B PTS: 1 DIF: 2 REF: 5-1 TOP: Inelastic demand | Total revenue MSC: Applicative
相关推荐：
loading