曼昆《经济学原理》(微观)第五版测试题库 (05)

Chapter 5Elasticity and Its ApplicationTRUE/FALSE1. Elasticity measures how responsive quantity is to changes in price.ANS: T DIF: 1 REF: 5-0 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Definitional2. Measures of elasticity enhance our ability to study the magnitudes of changes.ANS: T DIF: 1 REF: 5-0 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Definitional3. The demand for bread is likely to be more elastic than the demand for solid-gold bread plates.ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive4. In general, demand curves for necessities tend to be price elastic.ANS: F DIF: 1 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive5. In general, demand curves for luxuries tend to be price elastic.ANS: T DIF: 1 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive6. Necessities tend to have inelastic demands, whereas luxuries have elastic demands.ANS: T DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive7. Goods with close substitutes tend to have more elastic demands than do goods without close substitutes. ANS: T DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive8. The demand for Rice Krispies is more elastic than the demand for cereal in general.ANS: T DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive9. The demand for soap is more elastic than the demand for Dove soap.ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive10. The demand for gasoline will respond more to a change in price over a period of five weeks than over a periodof five years.ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive11. Even the demand for a necessity such as gasoline will respond to a change in price, especially over a longertime horizon.ANS: T DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive12. The price elasticity of demand is defined as the percentage change in quantity demanded divided by thepercentage change in price.ANS: T DIF: 1 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Definitional13. The price elasticity of demand is defined as the percentage change in price divided by the percentage changein quantity demanded.ANS: F DIF: 1 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Definitional288Chapter 5 /Elasticity and Its Application ❖289 14. Suppose that when the price rises by 20% for a particular good, the quantity demanded of that good falls by10%. The price elasticity of demand for this good is equal to 2.0.ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Analytical15. Suppose that when the price rises by 10% for a particular good, the quantity demanded of that good falls by20%. The price elasticity of demand for this good is equal to 2.0.ANS: T DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Analytical16. If the price of calculators increases by 15 percent and the quantity demanded per week falls by 45 percent as aresult, then the price elasticity of demand is 3.ANS: T DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Applicative17. Demand is inelastic if the price elasticity of demand is greater than 1.ANS: F DIF: 1 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Inelastic demand MSC: Definitional18. A linear, downward-sloping demand curve has a constant elasticity but a changing slope.ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive19. Price elasticity of demand along a linear, downward-sloping demand curve increases as price falls.ANS: F DIF: 3 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive20. If the price elasticity of demand is equal to 0, then demand is unit elastic.ANS: F DIF: 1 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Definitional21. If the price elasticity of demand is equal to 1, then demand is unit elastic.ANS: T DIF: 1 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Definitional22. Demand for a good is said to be inelastic if the quantity demanded increases substantially when the price fallsby a small amount.ANS: F DIF: 1 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Inelastic demand MSC: Definitional23. The midpoint method is used to calculate elasticity between two points because it gives the same answerregardless of the direction of the change.ANS: T DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Midpoint method MSC: Interpretive24. The flatter the demand curve that passes through a given point, the more inelastic the demand.ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive25. The flatter the demand curve that passes through a given point, the more elastic the demand.ANS: T DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Interpretive26. If demand is perfectly inelastic, the demand curve is vertical, and the price elasticity of demand equals 0. ANS: T DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Perfectly inelastic demand MSC: Interpretive27. If demand is perfectly elastic, the demand curve is horizontal, and the price elasticity of demand equals 1. ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Perfectly elastic demand MSC: Interpretive290 ❖Chapter 5 /Elasticity and Its Application28. Along the elastic portion of a linear demand curve, total revenue rises as price rises.ANS: F DIF: 3 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Total revenue | Price elasticity of demandMSC: Interpretive29. If a firm is facing elastic demand, then the firm should decrease price to increase revenue.ANS: T DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Total revenue | Price elasticity of demandMSC: Applicative30. If a firm is facing inelastic demand, then the firm should decrease price to increase revenue.ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Total revenue | Price elasticity of demandMSC: Applicative31. When demand is inelastic, a decrease in price increases total revenue.ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Inelastic demand | Total revenue MSC: Interpretive32. The income elasticity of demand is defined as the percentage change in quantity demanded divided by thepercentage change in income.ANS: T DIF: 1 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Income elasticity of demand MSC: Definitional33. The income elasticity of demand is defined as the percentage change in quantity demanded divided by thepercentage change in price.ANS: F DIF: 1 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Income elasticity of demand MSC: Definitional34. Normal goods have negative income elasticities of demand, while inferior goods have positive incomeelasticities of demand.ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Income elasticity of demand MSC: Interpretive35. If the income elasticity of demand for a good is negative, then the good must be an inferior good.ANS: T DIF: 1 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Income elasticity of demand MSC: Interpretive36. If the cross-price elasticity of demand for two goods is negative, then the two goods are substitutes. ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Cross-price elasticity of demand MSC: Interpretive37. If the cross-price elasticity of demand for two goods is negative, then the two goods are complements. ANS: T DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Cross-price elasticity of demand MSC: Interpretive38. Cross-price elasticity of demand measures how the quantity demanded of one good changes as the price ofanother good changes.ANS: T DIF: 1 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Cross-price elasticity of demand MSC: Definitional39. Cross-price elasticity is used to determine whether goods are inferior or normal goods.ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Cross-price elasticity of demand MSC: Interpretive40. Cross-price elasticity is used to determine whether goods are substitutes or complements.ANS: T DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Cross-price elasticity of demand MSC: InterpretiveChapter 5 /Elasticity and Its Application ❖291 41. The cross-price elasticity of garlic salt and onion salt is -2, which indicates that garlic salt and onion salt aresubstitutes.ANS: F DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Cross-price elasticity of demand MSC: Interpretive42. Price elasticity of supply measures how much the quantity supplied responds to changes in the price.ANS: T DIF: 1 REF: 5-2 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of supply MSC: Definitional43. Supply and demand both tend to be more elastic in the long run and more inelastic in the short run.ANS: T DIF: 2 REF: 5-1 | 5-2 NAT: AnalyticLOC: Elasticity TOP: Price elasticities of demand and supplyMSC: Interpretive44. If the price elasticity of supply is 2 and the quantity supplied decreases by 6%, then the price must havedecreased by 3%.ANS: T DIF: 2 REF: 5-2 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of supply MSC: Applicative45. Supply is said to be inelastic if the quantity supplied responds substantially to changes in the price, and elasticif the quantity supplied responds only slightly to price.ANS: F DIF: 1 REF: 5-2 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of supply MSC: Definitional46. Supply tends to be more elastic in the short run and more inelastic in the long run.ANS: F DIF: 2 REF: 5-2 NAT: AnalyticTOP: Price elasticity of supply MSC: Interpretive47. When the price of knee braces increased by 25 percent, the Brace Yourself Company increased its quantitysupplied of knee braces per week by 75 percent. BYC's price elasticity of supply of knee braces is 0.33. ANS: F DIF: 2 REF: 5-2 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of supply MSC: Applicative48. If a supply curve is horizontal, then supply is said to be perfectly elastic, and the price elasticity of supplyapproaches infinity.ANS: T DIF: 2 REF: 5-2 NAT: AnalyticLOC: Elasticity TOP: Perfectly elastic supply MSC: Interpretive49. A government program that reduces land under cultivation hurts farmers but helps consumers.ANS: F DIF: 2 REF: 5-3 NAT: AnalyticLOC: Elasticity TOP: Total revenue MSC: Applicative50. OPEC failed to maintain a high price of oil in the long run, partly because both the supply of oil and thedemand for oil are more elastic in the long run than in the short run.ANS: T DIF: 2 REF: 5-3 NAT: AnalyticLOC: Elasticity TOP: OPEC | Price elasticity of demand | Price elasticity of supplyMSC: Applicative51. Drug interdiction, which reduces the supply of drugs, may decrease drug-related crime because the demand fordrugs is inelastic.ANS: F DIF: 2 REF: 5-3 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand MSC: Applicative292 ❖Chapter 5 /Elasticity and Its ApplicationSHORT ANSWER1. Consider the following pairs of goods. For which of the two goods would you expect the demand to be moreprice elastic? Why?a.water or diamondsb.insulin or nasal decongestant sprayc.food in general or breakfast cereald.gasoline over the course of a week or gasoline over the course of a yeare.personal computers or IBM personal computersANS:a.Diamonds are luxuries, and water is a necessity. Therefore, diamonds have the more elastic demand.b.Insulin has no close substitutes, but decongestant spray does. Therefore, nasal decongestant spray has themore elastic demand.c.Breakfast cereal has more substitutes than does food in general. Therefore, breakfast cereal has the moreelastic demand.d.The longer the time period, the more elastic demand is. Therefore, gasoline over the course of a year hasthe more elastic demand.e.There are more substitutes for IBM personal computers than there are for personal computers. Therefore,IBM personal computers have the more elastic demand.DIF: 2 REF: 5-1 NAT: Analytic LOC: ElasticityTOP: Price elasticity of demand MSC: ApplicativeChapter 5 /Elasticity and Its Application ❖ 2932. You own a small town movie theatre. You currently charge $5 per ticket for everyone who comes to yourmovies. Your friend who took an economics course in college tells you that there may be a way to increase1020304050607080901001234567891051015202530354045505560657012345678910a.What is your current total revenue for both groups? b.The elasticity of demand is more elastic in which market? c.Which market has the more inelastic demand? d.What is the elasticity of demand between the prices of $5 and $2 in the adult market? Is this elastic or inelastic? e.What is the elasticity of demand between $5 and $2 in the children's market? Is this elastic or inelastic?f. Given the graphs and what your friend knows about economics, he recommends you increase theprice of adult tickets to $8 each and lower the price of a child's ticket to $3. How much could youincrease total revenue if you take his advice? ANS:a. Total revenue from children's tickets is $100 and from adult tickets is $250. Total revenue from allsales would be $350.b. The demand for children's tickets is more elastic.c. The adult ticket market has the more inelastic demand.d. The elasticity of demand between $5 and $2 is 0.26, which is inelastic.e. The elasticity of demand between $5 and $2 is 1.0, which is unit elastic.f. Total revenue in the adult market would be $320. Total revenue in the children’s market wouldbe $120, so total revenue for both groups would be $440. $440 - $350 is an increase in totalrevenue of $90.DIF: 2 REF: 5-1 NAT: AnalyticLOC: Elasticity TOP: Price elasticity of demand | Total revenue MSC: Applicative294 ❖Chapter 5 /Elasticity and Its Application3. Use the graph shown to answer the following questions. Put the correct letter(s) in the blank.a.The elastic section of the graph is represented by section from _______.b.The inelastic section of the graph is represented by section from _______.c.The unit elastic section of the graph is represented by section _______.d.The portion of the graph in which a decrease in price would cause total revenue to fall would befrom _________.e.The portion of the graph in which a decrease in price would cause total revenue to rise would befrom _________.f.The portion of the graph in which a decrease in price would not cause a change in total revenuewould be _________.g.The section of the graph in which total revenue would be at a maximum would be _______.h.The section of the graph in which elasticity is greater than 1 is _______.i.The section of the graph in which elasticity is equal to 1 is ______.j.The section of the graph in which elasticity is less than 1 is _______.ANS:a. A to Bb. B to Cc.Bd. B to Ce. A to Bf.Bg.Bh. A to Bi.Bj. B to CDIF: 2 REF: 5-1 NAT: Analytic LOC: ElasticityTOP: Price elasticity of demand | Total revenue MSC: ApplicativeChapter 5 /Elasticity and Its Application ❖ 2954. Using the midpoint method, compute the elasticity of demand between points A and B. Is demand along thisportion of the curve elastic or inelastic? Interpret your answer with regard to price and quantity demanded. Now compute the elasticity of demand between points B and C. Is demand along this portion of the curve elastic or inelastic?100200300400500600700800900246810121416182022ANS:In the section of the demand curve from A to B, the elasticity of demand would be 2.5. This would be an elastic portion of the curve. This would mean that for every 1 percent change in price, quantity demanded would change by2.5 percent.In the section of the demand curve from B to C, the elasticity of demand would be .75. This would be an inelastic portion of the curve. This would mean that for every 1 percent change in price, quantity demanded would change by 0.75 percent.DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Applicative 5. When the Shaffers had a monthly income of $4,000, they usually ate out 8 times a month. Now that the couplemakes $4,500 a month, they eat out 10 times a month. Compute the couple's income elasticity of demand using the midpoint method. Explain your answer. (Is a restaurant meal a normal or inferior good to thecouple?)ANS:The income elasticity of demand for the Shaffers is 1.89. Since the income elasticity of demand is positive, eating out would be interpreted as a normal good.DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Income elasticity of demandMSC: Applicative 6. Recently, in Smalltown, the price of Twinkies fell from $0.80 to $0.70. As a result, the quantity demanded ofHo-Ho's decreased from 120 to 100. What would be the appropriate elasticity to compute? Using the midpoint method, compute this elasticity. What does your answer tell you?ANS:The appropriate elasticity to compute would be cross-price elasticity. The cross-price elasticity for this example would be 1.36. The two goods are substitutes because the cross-price elasticity is positive.DIF: 2 REF: 5-1NAT: Analytic LOC: ElasticityTOP: Cross-price elasticity of demand MSC: Applicative296 ❖Chapter 5 /Elasticity and Its ApplicationSec00 - Elasticity and Its ApplicationMULTIPLE CHOICE1. In general, elasticity is a measure ofa.the extent to which advances in technology are adopted by producers.b.the extent to which a market is competitive.c.how firms’ profits respond to changes in market prices.d.how much buyers and sellers respond to changes in market conditions.ANS: D DIF: 1 REF: 5-0NAT: Analytic LOC: Elasticity TOP: Elasticity MSC: Definitional2. Elasticity isa. a measure of how much buyers and sellers respond to changes in market conditions.b.the study of how the allocation of resources affects economic well-being.c.the maximum amount that a buyer will pay for a good.d.the value of everything a seller must give up to produce a good.ANS: A DIF: 1 REF: 5-0NAT: Analytic LOC: Elasticity TOP: Elasticity MSC: Definitional3. When studying how some event or policy affects a market, elasticity provides information on thea.equity effects on the market by identifying the winners and losers.b.magnitude of the effect on the market.c.speed of adjustment of the market in response to the event or policy.d.number of market participants who are directly affected by the event or policy.ANS: B DIF: 2 REF: 5-0NAT: Analytic LOC: Elasticity TOP: Elasticity MSC: Interpretive4. How does the concept of elasticity allow us to improve upon our understanding of supply and demand?a.Elasticity allows us to analyze supply and demand with greater precision than would be the case inthe absence of the elasticity concept.b.Elasticity provides us with a better rationale for statements such as “an increase in x will lead to adecrease in y” than we would have in the absence of the elasticity concept.c.Without elasticity, we would not be able to address the direction in which price is likely to move inresponse to a surplus or a shortage.d.Without elasticity, it is very difficult to assess the degree of competition within a market.ANS: A DIF: 2 REF: 5-0NAT: Analytic LOC: Elasticity TOP: Elasticity MSC: Interpretive5. When consumers face rising gasoline prices, they typicallya.reduce their quantity demanded more in the long run than in the short run.b.reduce their quantity demanded more in the short run than in the long run.c.do not reduce their quantity demanded in the short run or the long run.d.increase their quantity demanded in the short run but reduce their quantity demanded in the longrun.ANS: A DIF: 2 REF: 5-0NAT: Analytic LOC: Elasticity TOP: Elasticity MSC: Applicative6. A 10 percent increase in gasoline prices reduces gasoline consumption by abouta. 6 percent after one year and 2.5 percent after five years.b. 2.5 percent after one year and 6 percent after five years.c.10 percent after one year and 20 percent after five years.d.0 percent after one year and 1 percent after five years.ANS: B DIF: 2 REF: 5-0NAT: Analytic LOC: Elasticity TOP: Elasticity MSC: ApplicativeChapter 5 /Elasticity and Its Application ❖2977. Which of the following statements about the consumers’ responses to rising gasoline prices is correct?a.About 10 percent of the long-run reduction in quantity demanded arises because people drive lessand about 90 percent arises because they switch to more fuel-efficient cars.b.About 90 percent of the long-run reduction in quantity demanded arises because people drive lessand about 10 percent arises because they switch to more fuel-efficient cars.c.About half of the long-run reduction in quantity demanded arises because people drive less andabout half arises because they switch to more fuel-efficient cars.d.Because gasoline is a necessity, consumers do not decrease their quantity demanded in either theshort run or the long run.ANS: C DIF: 2 REF: 5-0NAT: Analytic LOC: Elasticity TOP: Elasticity MSC: ApplicativeSec01 - Elasticity and Its Application - The Elasticity of DemandMULTIPLE CHOICE1. The price elasticity of demand measures how mucha.quantity demanded responds to a change in price.b.quantity demanded responds to a change in income.c.price responds to a change in demand.d.demand responds to a change in supply.ANS: A DIF: 1 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Definitional2. The price elasticity of demand measuresa.buyers’ responsiveness to a change in the price of a good.b.the extent to which demand increases as additional buyers enter the market.c.how much more of a good consumers will demand when incomes rise.d.the movement along a supply curve when there is a change in demand.ANS: A DIF: 1 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Definitional3. The price elasticity of demand for a good measures the willingness ofa.consumers to buy less of the good as price rises.b.consumers to avoid monopolistic markets in favor of competitive markets.c.firms to produce more of a good as price rises.d.firms to cater to the tastes of consumers.ANS: A DIF: 1 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Interpretive4. Which of the following statements about the price elasticity of demand is correct?a.The price elasticity of demand for a good measures the willingness of buyers of the good to buyless of the good as its price increases.b.Price elasticity of demand reflects the many economic, psychological, and social forces that shapeconsumer tastes.c.Other things equal, if good x has close substitutes and good y does not have close substitutes, thenthe demand for good x will be more elastic than the demand for good y.d.All of the above are correct.ANS: D DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Interpretive5. For a good that is a necessity,a.quantity demanded tends to respond substantially to a change in price.b.demand tends to be inelastic.c.the law of demand does not apply.d.All of the above are correct.ANS: B DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Interpretive6. Goods with many close substitutes tend to havea.more elastic demands.b.less elastic demands.c.price elasticities of demand that are unit elastic.d.income elasticities of demand that are negative.ANS: A DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Interpretive7. Which of the following is likely to have the most price inelastic demand?a.mint-flavored toothpasteb.toothpastec.Colgate mint-flavored toothpasted. a generic mint-flavored toothpasteANS: B DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Applicative8. Which of the following is likely to have the most price inelastic demand?a.white chocolate chip with macadamia nut cookiesb.Mrs. Field’s chocolate chip cookiesk chocolate chip cookiesd.cookiesANS: D DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Applicative9. If the price of natural gas rises, when is the price elasticity of demand likely to be the highest?a.immediately after the price increaseb.one month after the price increasec.three months after the price increased.one year after the price increaseANS: D DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Applicative10. If the price of milk rises, when is the price elasticity of demand likely to be the lowest?a.immediately after the price increaseb.one month after the price increasec.three months after the price increased.one year after the price increaseANS: A DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Applicative11. For a good that is a luxury, demanda.tends to be inelastic.b.tends to be elastic.c.has unit elasticity.d.cannot be represented by a demand curve in the usual way.ANS: B DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Interpretive12. For a good that is a necessity, demanda.tends to be inelastic.b.tends to be elastic.c.has unit elasticity.d.cannot be represented by a demand curve in the usual way.ANS: A DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Interpretive13. A person who takes a prescription drug to control high cholesterol most likely has a demand for that drug thatisa.inelastic.b.unit elastic.c.elastic.d.highly responsive to changes in income.ANS: A DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Interpretive14. The demand for Neapolitan ice cream is likely quite elastic becausea.ice cream must be eaten quickly.b.this particular flavor of ice cream is viewed as a necessity by many ice-cream lovers.c.the market is broadly defined.d.other flavors of ice cream are good substitutes for this particular flavor.ANS: D DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Interpretive15. The demand for Werthers candy is likelya.elastic because candy is expensive relative to other snacks.b.elastic because there are many close substitutes for Werthers.c.elastic because Werthers are regarded as a necessity by many people.d.inelastic because it is usually eaten quickly, making the relevant time horizon short.ANS: B DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Interpretive16. There are very few, if any, good substitutes for motor oil. Therefore,a.the demand for motor oil would tend to be inelastic.b.the demand for motor oil would tend to be elastic.c.the demand for motor oil would tend to respond strongly to changes in prices of other goods.d.the supply of motor oil would tend to respon d strongly to changes in people’s tastes for large carsrelative to their tastes for small cars.ANS: A DIF: 2 REF: 5-1NAT: Analytic LOC: Elasticity TOP: Price elasticity of demandMSC: Interpretive。