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Terms in this set (45)
The proportion of income allocated to a particular good or service is a determinant of
the price elasticity of demand
If quantity supplied by producers is relatively responsive to price changes, supply is relatively price
elastic
Which of the following products are targeted by government legislatures for increased excise taxes? (More than 1 answer)
-Toothpaste
-Liquor
-Cigarettes
-Gasoline
-Liquor
-Cigarettes
-Gasoline
Which of the following goods and services would most likely exhibit an inelastic price elasticity of demand? (More than one answer)
-Auto repairs
-Beef
-Medical Care
-Milk
-Dining Out
-Auto repairs
-Medical Care
-Milk
Total revenue is calculated by _________ the product price by the quantity sold
Multiplying
The midpoint formula for calculating elasticity ________ the two prices and the two quantities
Averages
Luxuries vs. _________ is one of the determinants of the price elasticity of demand
Necessities
What are some arguments in favor of legalizing illegal drugs? (More than 1 answer)
-Legalization would reduce drug trafficking
-It would make drug use more socially acceptable and
increase the demand for cocaine and heroin
-Drugs should by treated like alcohol and regulated for purity
-The current war on drugs has been unsuccessful
-Legalization would reduce drug trafficking
-Drugs should by treated like alcohol and regulated for purity
-The current war on drugs has been unsuccessful
What is the term that indicates the total amount the seller receives for the sale of a product in a particular time period?
Total Revenue
The price elasticity of demand and ______ revenue are inversely related
total
_____ is the ease of switching from one good to another
Substitutability
What is the name of the formula used to accurately calculate the price elasticity of demand?
Midpoint Formula
The passage of _______ involved in making a decision is one determinant of price elasticity of demand
Time
Which of the following reasons explains the high prices of antiques? (More than 1 answer)
-Strong Demand
-Perfectly Inelastic Supply
-High
Elastic Supply
-Limited supply
-Highly inelastic supply
-Strong Demand
-Limited supply
-Highly inelastic supply
The price elasticity of demand for most farm products is relatively price ________
Inelastic
When demand is relatively price ________, a price decrease will increase total revnue
Elastic
Which of the following are the main sources of gold price fluctuations? (More than 1 answer)
-Highly elastic supply
-Highly elastic demand
-Highly inelastic supply
-Perfectly elastic demand
-Shifts in Demand
-Highly inelastic supply
-Shifts in Demand
Restaurant meals, filet mignon, and Cadillacs, are all examples of goods that exhibit relatively price _________ demand
Elastic
If the price elasticity of demand is unit elastic and price changes, total revenue will:
Stay constant
With a unit elastic demand, when price changes, total revenue ___________
stays constant
A small percentage in quantity demanded divided by a larger percentage in price price results in a relatively price ___________ demand
Inelastic
When the price elasticity is relatively price inelastic, a price increase will have what effect on total revenue?
Total Revenue will rise
Because of the limited, highly _________ supply of gold, small changes in demand produce large changes in price
Inelastic
When demand is elastic, the coefficient of price elasticity of demand will be
greater than 1
Which of the following would be characteristics of a good with relatively elastic demand? (More than 1 answer)
-High-priced good relative to
income
-Luxury
-Low-priced good relative to income
-Necessity
-Few Substitutes
-High-priced good relative to income
-Luxury
When the time period under consideration is longer, product demand is generally more __________
Elastic
Demand is relatively price __________ when price and total revenue move in the same direction
Inelastic
The __________ ____________ of demand measures the responsiveness/sensitivity of consumers to a price change
price; elasticity
What are some arguments against legalizing illegal drugs? (More than 1 answer)
-The associated costs of the wart on drugs have decreased significantly
-Overall demand for
cocaine and heroin is more elastic than proponents think
-Removal of legal prohibitions against using drugs might make drugs more socially acceptable
-The associated costs of the war on drugs have increase significantly
-Overall demand for cocaine and heroin is more elastic than proponents think
-Removal of legal prohibitions against using drugs might make drugs more socially acceptable
When a small change in price causes quantity to increase from zero to all that buyers can obtain, the price elasticity of demand is consdiered
perfectly elastic
Without subsidies, increases in the quantities of farm products would tend to ___________ the total revenue of farmers
decrease
Since price and quantity demanded are inversely related, the price elasticity of demand coefficient would always be a __________ number
negative
If the percentage change in quantity demanded is less than the percentage change in price, then the price elasticity of demand is _________
inelastic
Price elasticity less than 1 is
inelastic
All of the following goods would likely exhibit relatively price inelastic demand, except?
Milk, Automobiles, Insulin, Gasoline, Electricity
Automobiles
When an increase/decrease in price does not change total revenue, demand is ________ elastic
unit
When demand is relatively price elastic, total revenues will _______ when price decreases
Increase
The price of elasticity of supply is more ____________ in the long run, than in the short run
elastic
_________ in price when a product is relatively price elastic will lead to a decrease in total revenue
An increase
As you move from higher to lower prices, the price elasticity of demand __________
declines
Because gold production is a costly and time-consuming process, the ________ of gold is:
Supply
Price elasticity of a luxury is _________
greater than one
Regardless of the degree of elasticity, price and total revenue always move together in the same direction when discussing the price elasticity of _______________
supply
When the price elasticity coefficient is equal to infinity, the product exhibits ___________ demand
perfectly elastic
The percentage change in quantity supplied divided by the percentage change in price measures the price elasticity of _________
supply
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Verified answer
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