Multiple Choice Question 9 The coefficient of price elasticity of good X is 1.00
ID: 2439073 • Letter: M
Question
Multiple Choice
Question 9 The coefficient of price elasticity of good X is 1.00 If good X is put on sale "buy one get one free"
1.
total revenue will go up by 50%
2.
total revenue will go up by 100%
3.
total revenue will go up by more than 50% but less than 100%
4.
total revenue will not change
QUESTION 10
1. Change in the quantity supplied reflects a
1.
change in price
2.
switch from one supply curve to another
3.
change in one or more nonprice variables
4.
shift in supply
QUESTION 11
1. Holding all else equal, an unnecessary increase in federally-mandated auto safety requirements leads to a decrease in
1.
auto demand
2.
the quantity of autos supplied
3.
auto supply
4.
the quantity of autos demanded
QUESTION 12
1. Farmers in certain areas of the U.S. can grow either wheat or corn. If the price of corn increases the
1.
supply of wheat will shift to the right
2.
supply of wheat will shift to the left
3.
supply of both corn and wheat will shift, but in opposite directions
4.
supply of corn will shift to the right
1.
total revenue will go up by 50%
2.
total revenue will go up by 100%
3.
total revenue will go up by more than 50% but less than 100%
4.
total revenue will not change
Explanation / Answer
Question 9
4. Revenue will not change. Buy one get one free is reduction in price of the good by 50%. Unit elasticity (PED=1) means that a change in the price of the good results in a proportional change in the quantity demanded. If price falls by 50%, then revenu increases by 50%. There is no change in the total revenue.
Question 10.
1. Change in price. A movement along the supply curve occurs when quantity supplied changes due to a change in price other things remaining same. At higher price, more quantity will be supplied and vice-versa.
Question 11
3. Auto supply. This is a shift in the supply curve since it is caused by one of the determinants of supply. The supply curve will shift inwards, to the right. Supply is reduced.
Question 12
4. Supply of wheat will shift to the left as farmers will produce more corn as price is higher.
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