经济学原理对应练习 05(5)

Chapter 5/Elasticity and Its Applications ? 189

112. Refer to Figure 5-8. At a price of $48 per unit, sellers' total revenue amounts to

a. $150. b. $200. c. $288. d. $364. ANS: C PTS: 1 DIF: 1 REF: 5-1 TOP: Total revenue MSC: Definitional 113. If the demand for donuts is elastic, then a decrease in the price of donuts will

a. increase total revenue of donut sellers. b. decrease total revenue of donut sellers. c. not change total revenue of donut sellers.

d. There is not enough information to answer this question. ANS: A PTS: 1 DIF: 2 REF: 5-1 TOP: Elastic demand | Total revenue MSC: Applicative

114. The local pizza restaurant makes such great bread sticks that consumers do not respond much at all to a change in the

price. If the owner is only interested in increasing revenue, he should a. lower the price of the bread sticks.

b. leave the price of the bread sticks alone. c. raise the price of the bread sticks. d. reduce costs. ANS: C PTS: 1 DIF: 2 REF: 5-1 TOP: Inelastic demand | Total revenue MSC: Interpretive 115. Eric produces jewelry boxes. If the demand for jewelry boxes is elastic and Eric wants to increase his total revenue,

he should

a. increase the price of his jewelry boxes. b. decrease the price of his jewelry boxes. c. not change the price of his jewelry boxes. d. None of the above answers is correct. ANS: B PTS: 1 DIF: 2 REF: 5-1 TOP: Elastic demand | Total revenue MSC: Interpretive 116. When demand is inelastic within a certain price range, then within that price range,

a. an increase in price would increase total revenue because the decrease in quantity demanded is proportionately

less than the increase in price.

b. an increase in price would decrease total revenue because the decrease in quantity demanded is proportionately

greater than the increase in price.

c. a decrease in price would increase total revenue because the increase in quantity demanded is proportionately

smaller than the decrease in price.

d. a decrease in price would not affect total revenue. ANS: A PTS: 1 DIF: 3 REF: 5-1 TOP: Inelastic demand | Total revenue MSC: Applicative 117. When demand is inelastic the price elasticity of demand is

a. less than 1, and price and total revenue will move in the same direction. b. less than 1, and price and total revenue will move in opposite directions. c. greater than 1, and price and total revenue will move in the same direction. d. greater than 1, and price and total revenue will move in opposite directions. ANS: A PTS: 1 DIF: 2 REF: 5-1 TOP: Inelastic demand | Total revenue MSC: Applicative

118. If the price elasticity of demand for tuna is 0.7, then a 1.5% increase in the price of tuna will decrease the quantity

demanded of tuna by

a. 1.05% and tuna sellers' total revenue will increase as a result. b. 1.05% and tuna sellers' total revenue will decrease as a result. c. 2.14% and tuna sellers' total revenue will increase as a result. d. 2.14% and tuna sellers' total revenue will decrease as a result. ANS: A PTS: 1 DIF: 3 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Analytical

190 ? Chapter 5/Elasticity and Its Applications

119. If the price elasticity of demand for aluminum foil is 1.45, then a 2.4% decrease in the price of aluminum foil will

increase the quantity demanded of aluminum foil by

a. 1.66% and aluminum foil sellers' total revenue will increase as a result. b. 1.66% and aluminum foil sellers' total revenue will decrease as a result. c. 3.48% and aluminum foil sellers' total revenue will increase as a result. d. 3.48% and aluminum foil sellers' total revenue will decrease as a result. ANS: C PTS: 1 DIF: 3 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Analytical 120. Holding all other forces constant, if raising the price of a good leads to a fall in total revenue, then the demand for the

good must be a. unit elastic. b. inelastic. c. elastic.

d. None of the above is correct, since a price increase always leads to an increase in total revenue. ANS: C PTS: 1 DIF: 2 REF: 5-1 TOP: Elastic demand | Total revenue MSC: Applicative 121. If a change in the price of a good results in no change in total revenue, then

a. the demand for the good must be elastic. b. the demand for the good must be inelastic. c. the demand for the good must be unit elastic.

d. buyers must not respond very much to a change in price. ANS: C PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Interpretive 122. When demand is unit elastic, price elasticity of demand

a. equals 1 and total revenue and price move in the same direction. b. equals 1 and total revenue and price move in opposite directions. c. equals 1 and total revenue does not change when price changes. d. equals 0 and total revenue does not change when price changes. ANS: C PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Interpretive

123. If the demand curve is linear and downward sloping, which of the following statements is not correct?

a. Demand is more elastic on the lower part of the demand curve than on the upper part.

b. Different pairs of points on the demand curve can result in different values of the price elasticity of demand. c. Different pairs of points on the demand curve cannot result in different values of the slope of the demand curve. d. Starting from a point on the upper part of the demand curve, an increase in price leads to a decrease in total

revenue.

ANS: A PTS: 1 DIF: 3 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Analytical 124. For a vertical demand curve,

a. slope is undefined and price elasticity of demand is equal to 0. b. slope is equal to 0 and price elasticity of demand is undefined. c. slope and price elasticity of demand both are undefined. d. slope and price elasticity of demand both are equal to 0. ANS: A PTS: 1 DIF: 2 REF: 5-1 TOP: Perfectly inelastic demand MSC: Interpretive

125. In which of these instances is demand said to be perfectly inelastic?

a. An increase in price of 2% causes a decrease in quantity demanded of 2%. b. A decrease in price of 2% causes an increase in quantity demanded of 0%. c. A decrease in price of 2% causes a decrease in total revenue of 0%. d. The demand curve is horizontal. ANS: B PTS: 1 DIF: 2 REF: 5-1 TOP: Perfectly inelastic demand MSC: Interpretive

Chapter 5/Elasticity and Its Applications ? 191

126. For a horizontal demand curve,

a. slope is undefined and price elasticity of demand is equal to 0. b. slope is equal to 0 and price elasticity of demand is undefined. c. slope and price elasticity of demand both are undefined. d. slope and price elasticity of demand both are equal to 0. ANS: B PTS: 1 DIF: 2 REF: 5-1 TOP: Perfectly elastic demand MSC: Interpretive

127. As we move downward and to the right along a linear, downward-sloping demand curve,

a. slope and elasticity both remain constant. b. slope changes but elasticity remains constant. c. slope and elasticity both change.

d. slope remains constant but elasticity changes. ANS: D PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand MSC: Interpretive

128. When we move upward and to the left along a linear demand curve, price elasticity of demand

a. first becomes smaller, then larger. b. always becomes larger. c. always becomes smaller.

d. first becomes larger, then smaller. ANS: B PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand MSC: Interpretive

129. Moving downward and to the right along a linear demand curve, we know that total revenue

a. first increases, then decreases. b. first decreases, then increases. c. always increases. d. always decreases. ANS: A PTS: 1 DIF: 2 REF: 5-1 TOP: Demand curve | Total revenue MSC: Interpretive 130. Total revenue will be at its largest value on a linear demand curve at

a. the top of the curve, where prices are highest. b. the midpoint of the curve.

c. the low end of the curve, where quantity demanded is highest. d. None of the above is correct. ANS: B PTS: 1 DIF: 2 REF: 5-1 TOP: Demand curve | Total revenue MSC: Interpretive 131. Total revenue

a. always increases as price increases.

b. increases as price increases, as long as demand is elastic. c. decreases as price increases, as long as demand is inelastic.

d. remains unchanged as price increases when demand is unit elastic. ANS: D PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Applicative 132. In which of the following situations will total revenue increase?

a. Price elasticity of demand is 1.2 and the price of the good decreases. b. Price elasticity of demand is 0.5 and the price of the good increases. c. Price elasticity of demand is 3.0 and the price of the good decreases. d. All of the above are correct. ANS: D PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Analytical

192 ? Chapter 5/Elasticity and Its Applications

133. Suppose you are in charge of setting prices at a local sandwich shop. The business needs to increase its total revenue

and your job is on the line. If the demand for sandwiches is elastic, you a. should increase the price of sandwiches. b. should decrease the price of sandwiches. c. should not change the price of sandwiches.

d. could not determine what to do with price until you determine whether supply is elastic or inelastic. ANS: B PTS: 1 DIF: 2 REF: 5-1 TOP: Elastic demand | Total revenue MSC: Applicative 134. You have just been hired as a business consultant to determine what pricing policy would be appropriate in order to

increase the total revenue of a major shoe store. The first step you would take would be to a. increase the price of every shoe in the store.

b. look for ways to cut costs and increase profit for the store.

c. determine the price elasticity of demand for the store's products. d. determine the price elasticity of supply for the store’s products. ANS: C PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Interpretive 135. Harry's Barber Shop increased its total monthly revenue from $1,500 to $1,800 when it raised the price of a haircut

from $5 to $9. The price elasticity of demand for Harry's Haircuts is a. 0.567. b. 0.700. c. 1.429. d. 2.200. ANS: B PTS: 1 DIF: 3 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Applicative 136. Barb's Bakery earned $200 in total revenue last month when it sold 100 loaves of bread. This month it earned $300 in

total revenue when it sold 60 loaves of bread. The price elasticity of demand for Barb's bread is a. 0.27. b. 0.58. c. 1.25. d. 1.71. ANS: B PTS: 1 DIF: 3 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Applicative 137. You are in charge of the local city-owned golf course. You need to increase the revenue generated by the golf course

in order to meet expenses. The mayor advises you to increase the price of a round of golf. The city manager recommends reducing the price of a round of golf. You realize that

a. the mayor thinks demand is elastic and the city manager thinks demand is inelastic. b. both the mayor and the city manager think that demand is elastic. c. both the mayor and the city manager think that demand is inelastic.

d. the mayor thinks demand is inelastic and the city manager thinks demand is elastic. ANS: D PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Applicative 138. Suppose that when the price of corn is $2 per bushel, farmers can sell 10 million bushels. When the price of corn is $3

per bushel, farmers can sell 8 million bushels. Which of the following statements is true?

a. The demand for corn is income inelastic, and so an increase in the price of corn will increase the total revenue of

corn farmers.

b. The demand for corn is income elastic, and so an increase in the price of corn will increase the total revenue of

corn farmers.

c. The demand for corn is price inelastic, and so an increase in the price of corn will increase the total revenue of

corn farmers.

d. The demand for corn is price elastic, and so an increase in the price of corn will increase the total revenue of corn

farmers.

ANS: C PTS: 1 DIF: 3 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Applicative

Chapter 5/Elasticity and Its Applications ? 193

139. Suppose a producer is able to separate customers into two groups, one having an inelastic demand and the other

having an elastic demand. If the producer's objective is to increase total revenue, she should

a. increase the price charged to customers with the elastic demand and decrease the price charged to customers with

the inelastic demand.

b. decrease the price charged to customers with the elastic demand and increase the price charged to customers with

the inelastic demand.

c. charge the same price to both groups of customers. d. increase the price for both groups of customers. ANS: B PTS: 1 DIF: 3 REF: 5-1 TOP: Elastic demand | Inelastic demand | Total revenue MSC: Analytical 140. Suppose that 50 candy bars are demanded at a particular price. If the price of candy bars rises from that price by 4

percent, the number of candy bars demanded falls to 46. Using the midpoint approach to calculate the price elasticity of demand, it follows that the

a. demand for candy bars in this price range is elastic. b. demand for candy bars in this price range is inelastic. c. demand for candy bars in this price range is unit elastic.

d. price elasticity of demand for candy bars in this price range is 0. ANS: A PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand MSC: Applicative

141. Suppose that 50 candy bars are demanded at a particular price. If the price of candy bars rises from that price by 5

percent, the number of candy bars demanded falls to 48. Using the midpoint approach to calculate the price elasticity of demand, it follows that the

a. demand for candy bars in this price range is elastic.

b. price increase will decrease the total revenue of candy bar sellers.

c. price elasticity of demand for candy bars in this price range is about 1.22. d. price elasticity of demand for candy bars in this price range is about 0.82. ANS: D PTS: 1 DIF: 3 REF: 5-1 TOP: Price elasticity of demand | Total revenue MSC: Applicative

Figure 5-9 142. Refer to Figure 5-9. Between point A and point B,

a. the slope is equal to -1/4 and the price elasticity of demand is equal to 2/3. b. the slope is equal to -1/4 and the price elasticity of demand is equal to 3/2. c. the slope is equal to -3/2 and the price elasticity of demand is equal to 1/4. d. the slope is equal to -2/3 and the price elasticity of demand is equal to 3/2. ANS: B PTS: 1 DIF: 2 REF: 5-1 TOP: Price elasticity of demand MSC: Applicative

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