NO: 13
DAILY TEST
Use the graph below to answer question number 61
61. Total revenue:
A. varies inversely with price in range b.
B. is always maximized at the midpoint of any demand curve.
C. remains unchanged as price changes in range b.
D. varies directly with price in range a.
E. none of the above.
62. Consumers will bear more of the burden of a tax the:
A. more elastic supply is.
B. more elastic demand is.
C. the more inelastic supply is.
D. consumers always bear the burden of the tax since they pa y the final price.
E. none of the above.
63. An income elasticity of demand equal to 2 for a particular product means that :
A. demand curves for the product slope upward.
B. the product is an inferior good.
C. a 10 percent increase in income will yield a 20 percent increase in the q uantity sold.
D. a 20 percent increase in income will result in a 10 percent increase in the q uantity sold.
E. (% change in Q) / (% change in P) = 2.
64. From which of the following data might you estimate a price elasticity of supply?
A. a price hike from $7 to $13 causes sales to fall from 16,000 shirts to 8,000 shirts monthly.
B. farmers increase soybean plantings 15 percent when the price increases 5 percent.
C. Ford's production increases when Chevy sales fall because GM raises prices.
D. the output of tennis balls slumps 8 percent when the prices o f racquets go up 12 percent.
E. steel production and sales rise 18 percent when national income grows 13 pe rcent.
65. The quantity of a good demanded rises from 90 units to 110 units when the price falls
from $1.20 to $.80 per
unit. The price elasticity of demand for this product approximates:
A. .5
B. 1.0
C. 2.0
D. 4.0
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