AP Microeconomics--Elasticity

Question 1

When demand is elastic, consumers will demand greater quantities when the price of the item?

Accepted Answer

decreases

Question 2

A PED of zero indicates demand for the product is ?

Accepted Answer

perfectly inelastic

Question 3

When computing cross elasticity, a negative answer indicates the products in question are?

Accepted Answer

complements

Question 4

If demand is inelastic and the firm raises its price, total revenue will

Accepted Answer

increase

Question 5

Goods that you buy more of when you have LESS money are?

Accepted Answer

inferior

Question 6

The main determinant of supply elasticity is ?

Accepted Answer

time

Question 7

Relatively speaking, the more vertical the demand curve, the more _____________the demand

Accepted Answer

inelastic

Question 8

When using the Mid-Point formula, an answer of 1.5 indicates that demand is?

Accepted Answer

elastic

Question 9

If demand for you product is inelastic and you want to make more money you should?

Accepted Answer

raise the price

Question 10

Elasticity of demand measures consumers responsiveness to changes in product______?

Accepted Answer

price

Question 11

Total Revenue is at its maximum when marginal revenue equals

Accepted Answer

0

Question 12

If consumers ALWAYS buy 20 of item X every month, then demand for item X is?

Accepted Answer

perfectly inelastic

Question 13

When computing income elasticity, a positive answer indicates the product in question is?

Accepted Answer

a normal good

Question 14

The supply of paintings by Picasso would be considered?

Accepted Answer

perfectly inelastic

Question 15

If producers are completely unable to respond to changes in price, then supply will be?

Accepted Answer

perfectly inelastic

Question 16

If many substitutes exist for a product, demand for that product is most likely

Accepted Answer

elastic

Question 17

The equation to determine supply elasticity is?

Accepted Answer

% change in quantity supplied divided by % change in price

Question 18

Which item would be the most supply elastic?

Accepted Answer

t shirts, strawberries, pencils

Question 19

A 10% increase in demand for "X" and a 20% decrease in the price for "Y", these items are

Accepted Answer

complements

Question 20

Demand for farm goods is typically inelastic, thus a great harvest means farm revenue will?

Accepted Answer

decrease

Questions 20