Chapter 18 Flashcards Preview

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Flashcards in Chapter 18 Deck (26)
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1
Q

An elasticity of 2 would be considered

A

Elastic

2
Q

A demand curve that is perfectly horizontal is

A

Perfectly elastic

3
Q

If demand is elastic and the price is raised

A

Quantity demanded will fall and total revenue will rise

4
Q

The advertiser wants to push her product’s demand curve

A

To the right and make less elastic

5
Q

The curve(showing a flat horizontal line) in the above graph

A

Is a perfectly elastic demand curve

6
Q

If a 1%change in the price leads to a .5% change in quantity demanded, then elasticity of demand is

A

.5

7
Q

If demand is inelastic and price is lowered, total revenue will

A

Fall

8
Q

Demand is elastic and price is lowered, total revenue will

A

Fall

9
Q

Demand is elastic when

A

Percentage change in quantity is greater then percentage change in price.

10
Q

In the graph(a\b\c\d\ along a straight line) unit elasticity occurs at about point

A

C

11
Q

The lowest elasticity in the (a\b\c\d\e) graph would be a point

A

E

12
Q

In elasticity of .75 means that a 1% change in the price will lead to a —–% change in the quantity demanded.

A

.75

13
Q

If price falls from $100 to $99 and quantity demanded rises fro 2 to 3, the demand is

A

Very elastic

14
Q

If a car dealership decides to offer a rebate to reduce the selling price of its cars and as a result finds an increase in its total revenues, then the demand for cars from this dealership is

A

Price elastic

15
Q

Which is true? Graph showing d1 crossing at middle with D2

A

D2 is more elastic than D1

16
Q

In general, the more the substitutes available for a good

A

The more elastic the demand for the good

17
Q

Total revenue will increase if price

A

Falls and demand is elastic

18
Q

Which of these elasticities is the least elastic?

A

1

19
Q

Cross elasticity of demand measure the response in

A

The quality of one good demanded to a change in the price of another good.

20
Q

A perfectly inelastic demand curve is

A

A vertical line

21
Q

If consumers are price sensitive, then

A

They will have elastic demand curves

22
Q

An elasticity of 1.5 means that 1% change in price will lead to a —–% change in quantity demanded.

A

1.5

23
Q

If more substitutes become available demand tends to become ——- elastic and over time demand tends to become —— elastic

A

More and more

24
Q

Income elasticity of demand measures how

A

The consumption of various goods and services respond to change in income.

25
Q

Which statement is true?

A

Advertisers try to make the demand for the products less elastic

26
Q

When the price of CD players increases 5%, quantity demanded decreases 5%. The price elasticity for CD players is

A

Unit elastic