Principles of Microeconomics, 8e (Case/Fair)
Chapter 5: Elasticity
Elasticity

Multiple Choice
Refer to the information provided in Figure 5.1 below to answer the questions that follow.

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Figure 5.1 1)
Refer to Figure 5.1. The demand for tickets is A) perfectly elastic. B) perfectly inelastic. C) unitarily elastic. D) income elastic. Answer:
B
Diff: 1 Type: F

2)
Price is determined entirely by demand when A) demand is downward sloping. B) demand is perfectly inelastic. C) supply is perfectly inelastic. D) supply is perfectly elastic. Answer:
C
Diff: 2 Type: D

3)
When supply is perfectly inelastic, A) price is determined solely by supply. B) price is determined solely by demand. C) only the government can set the price. D) the price may be set by either supply or demand. Answer:
B
Diff: 2 Type: D

4)
A ________ line is a perfectly price elastic demand curve. A) horizontal B) vertical C) positively sloped D) negatively sloped Answer:
A
Diff: 1 Type: F

5)
A ________ line is a perfectly price inelastic demand curve. A) horizontal B) vertical C) positively sloped D) negatively sloped Answer:
B
Diff: 1 Type: F

6)
When the price of radios increases 5%, quantity demanded decreases 5%. The price elasticity of demand for radios is A) perfectly inelastic. B) elastic. C) inelastic. D) unitary elastic. Answer:
D
Diff: 2 Type: D

7)
When the price of fresh fish increases 5%, quantity demanded decreases 10%. The price elasticity of demand for fresh fish is