1.If quantity demanded increases 15 percent when the price drops 1 percent, demand for this good:

A)   inelastic, but not perfectly inelastic.

B)   perfectly elastic.

C)   perfect inelastic.

D)   elastic, but not perfectly elastic.

2.If a good has elastic demand, a small price decrease will cause:

A)   a larger increase in quantity demanded.

B)   no change in the quantity demanded.

C)   a smaller increase in the quantity demanded.

D)   a larger decrease in the quantity demanded.

3.If a good has elastic demand, a small price decrease will cause:

A)   a larger increase in quantity demanded.

B)   no change in the quantity demanded.

C)   a smaller increase in the quantity demanded.

D)   a larger decrease in the quantity demanded.

4.If the price of World Cup Soccer tickets increases from $40 a ticket to $50 a ticket and the quantity demanded of tickets stays the same,  demand for the tickets is:

A)   perfectly inelastic.

B)   elastic, but not perfectly elastic.

C)   perfectly elastic.

D)   inelastic, but not perfectly inelastic.

5.If the demand curve for a given product is a straight line, this indicates that:

A)   demand is more elastic at higher prices.

B)   demand is less elastic at higher prices.

C)   elasticity is constant along the demand curve.

D)   demand is unit elastic.

6.Suppose that a given MP3 player now costs $300, and sales are now 5,000 units per month. The manufacturer has determined that if the price is reduced by $25, the demand will increase by 250 units per month. Calculate and describe the elasticity of demand.

A)   -0.56, elastic.

B)   -0.56, inelastic.

C)   -10.0, inelastic.

D)   -10.0, elastic.

答案和详解如下：

1.If quantity demanded increases 15 percent when the price drops 1 percent, demand for this good:

A)   inelastic, but not perfectly inelastic.

B)   perfectly elastic.

C)   perfect inelastic.

D)   elastic, but not perfectly elastic.

The correct answer was D)

Whenever quantity demanded for a good changes by a greater percentage than price, the price elasticity of demand will be greater than 1.0 and demand for the product is considered to be elastic.

2.If a good has elastic demand, a small price decrease will cause:

A)   a larger increase in quantity demanded.

B)   no change in the quantity demanded.

C)   a smaller increase in the quantity demanded.

D)   a larger decrease in the quantity demanded.

The correct answer was A)

If a good has elastic demand, a small price decrease will cause a larger increase in the quantity demanded.

3.If a good has elastic demand, a small price decrease will cause:

A)   a larger increase in quantity demanded.

B)   no change in the quantity demanded.

C)   a smaller increase in the quantity demanded.

D)   a larger decrease in the quantity demanded.

The correct answer was A)    

If a good has elastic demand, a small price decrease will cause a larger increase in the quantity demanded.

4.If the price of World Cup Soccer tickets increases from $40 a ticket to $50 a ticket and the quantity demanded of tickets stays the same,  demand for the tickets is:

A)   perfectly inelastic.

B)   elastic, but not perfectly elastic.

C)   perfectly elastic.

D)   inelastic, but not perfectly inelastic.

The correct answer was A)

Since the quantiy of tickets demanded stayed the same after the price changed, the demand curve would have to be vertical which is a perfectly inelastic demand curve.

5.If the demand curve for a given product is a straight line, this indicates that:

A)   demand is more elastic at higher prices.

B)   demand is less elastic at higher prices.

C)   elasticity is constant along the demand curve.

D)   demand is unit elastic.

The correct answer was A)

Elasticities will be greater (in absolute value) at higher prices.

6.Suppose that a given MP3 player now costs $300, and sales are now 5,000 units per month. The manufacturer has determined that if the price is reduced by $25, the demand will increase by 250 units per month. Calculate and describe the elasticity of demand.

A)   -0.56, elastic.

B)   -0.56, inelastic.

C)   -10.0, inelastic.

D)   -10.0, elastic.

The correct answer was B)    

Elasticity is the percentage change in quantity, divided by the percentage change in price. The percentage change in quantity is 250 / ((5000+5250)/2) = 0.049 or 4.9%. The percentage change in price is -25 / ((300+275)/2) = -0.087 or -8.7%. 4.9 / -8.7 = -0.56. Elasticity with an absolute value of less than 1 is considered inelastic.