Elasticities in Microeconomics MCQ
What was the amount of the luxury tax levied by Congress in 1991?
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The burden of the tax is more likely to fall on the party that has ______.
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Fewer good alternatives
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Which of the following is an accurate statement about supply?
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It is more inelastic in the short run.
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In a condition of perfectly elastic supply, the elasticity of supply is ______.
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If the price of one good and the demand for the other good move in the same direction, then the cross-price elasticity is ______.
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Which of the following accurately shows cross-price elasticity of demand?
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The desire for one good is affected by the cost of a related good.
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In the elastic region of a demand curve, when price falls, the total revenue ______, and when price rises, the total revenue ______.
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Rises; falls
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Which of the following price ranges of a linear demand curve will tend to be the most elastic?
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Very high price range
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When the price elasticity of demand is ______, total revenues will fall as the price declines.
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Inelastic
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A long-run elasticity of demand means that a consumer has ______.
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A lot of time to adjust to a price change
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The equation ED = 1 shows ______ demand.
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Unit elastic
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The equation ED = 1 shows ______ demand.
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Unit elastic
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If demand is ______ to changes in price, it is considered to be perfectly inelastic.
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Unresponsive
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The price elasticity of demand can be defined as the percentage change in quantity demanded ______ the percentage change in price.
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Divided by
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Which of the following will tend to have elastic demand?
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Goods with close substitutes
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Which of the following is an accurate statement about elasticity?
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A steep demand curve shows inelastic demand.
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Unit elastic demand is the Demand with a ____ elasticity of 1
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Total revenue is Amount _______ receive for a good or service.
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The measure of the sensitivity of the quantity supplied to changes in the price of a good is called
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Price elasticity of Supply
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The measure of the responsiveness of quantity demanded to a change in price is known as
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Price elasticity of demand
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Inelastic can describe as
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The percentage change in demand divided by the percentage change in consumers’ income is called
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Income elasticity of demand
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Elastic can be described as
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Cross-price elasticity of demand is the measure of the impact that the price change of one good will have on the demand of another good
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