SOLVED

11) Refer to Figure 7-2. A perfectly elastic demand curve is shown in A) Panel A. B) Panel B. C) Panel C. D) Panel D. 12) Refer to Figure 7-2. A perfectly inelastic demand curve is shown in A) Panel A. B) Panel B. C) Panel C. D) Panel D. 13) If 50 units are sold at a price of $20 and 80 units are sold at a price of $15, what is the absolute value of the price elasticity of demand? Use the midpoint formula. A) 0.17 B) 0.62 C) 1.62 D) 5 14) Refer to Figure 7-3. The absolute value of the price elasticity of demand at points a and b is 1. What is the value of Pb? A) $50 B) $40 C) $30 D) $20 15) Suppose a hurricane decreased the supply of oranges so that the price of oranges rose from $120 a ton to $180 a ton and quantity sold decreased from 800 tons to 240 tons. What is the absolute value of the price elasticity of demand? A) 0.11 B) 0.37 C) 2.69 D) 9.33 16) Refer to Figure 7-4. Using the midpoint formula, calculate the absolute value of the price elasticity of demand between e and f. A) 0.32 B) 0.4 C) 2.5 D) 3.125 17) Jaycee Jeans sold 40 pairs of jeans at a price of $40. When it lowered its price to $20, the quantity sold increased to 60 pairs. Calculate the absolute value of the price elasticity of demand. Use the midpoint formula. A) 1.67 B) 1.0 C) 0.6 D) 0.53 18) Which of the following statements about price elasticity of demand is false? A) The value of the price elasticity of demand is the reciprocal of the value of the demand curve’s slope. B) If quantity demanded changes by a larger percentage than the percentage change in price, demand is elastic. C) The value of the price elasticity of demand along a downward-sloping demand curve is always negative. D) A linear downward-sloping demand curve has a varying price elasticity coefficient. 19) Refer to Figure 7-5. Which of the following statements is true about the price elasticity of demand? A) The elasticity coefficient is constant along the demand curve. B) The elastic portion of a straight-line downward sloping demand curve corresponds to the segment above the midpoint. C) The inelastic portion of the demand curve corresponds to the segment above the midpoint. D) At the midpoint of the demand curve, the elasticity coefficient is zero. 20) Refer to Figure 7-5. The inelastic segment of the demand curve A) is coincident with the horizontal axis. B) is coincident with the vertical axis. C) lies below the midpoint of the curve. D) lies above the midpoint of the curve.