SOLVED

111) In the figure above, using the midpoint method, what is the price elasticity of demand when the price falls from $8 to $7? A) 4.0 B) 5.0 C) 0.5 D) 0.4 E) 0.25 112) In the figure above, if the price falls from $8 to $7 demand is A) elastic. B) inelastic. C) unit elastic. D) income elastic. E) perfectly elastic. 113) In the figure above, when the price falls from $8 to $7, total revenue A) increases from $120 to $210 so demand is elastic. B) decreases from $210 to $120 so demand is inelastic. C) increases from $120 to $210 so demand is inelastic. D) decreases from $210 to $120 so demand is elastic. E) increases from $120 to $210 but more information is needed to determine whether demand is elastic, inelastic, or unit elastic. 114) A firm raises the price it charges. The firm’s total revenue decreases. What can we conclude about the price elasticity of demand? A) Demand is elastic. B) Demand is unit elastic. C) Demand is inelastic. D) Demand is perfectly inelastic. E) Not enough information is given to conclude anything about price elasticity of demand. 115) A firm raises the price it charges. The firm’s total revenue does not change. What can we conclude about the price elasticity of demand? A) Demand is elastic. B) Demand is unit elastic. C) Demand is inelastic. D) Demand is perfectly elastic. E) Not enough information is given to conclude anything about price elasticity of demand. 116) A firm lowers the price it charges. The firm’s total revenue decreases. What can we conclude about the price elasticity of demand? A) Demand is elastic. B) Demand is unit elastic. C) Demand is inelastic. D) Demand is perfectly elastic. E) Not enough information is given to conclude anything about price elasticity of demand. 117) If, when the price falls, total revenue increases, demand is A) elastic. B) inelastic. C) unit elastic. D) perfectly inelastic. E) None of the above answers is correct because total revenue always decreases when the price of the good falls. 118) The price elasticity of demand for an agricultural product is 0.4. This value means that, when the quantity decreases 1 percent, the price A) falls 4 percent. B) rises 4 percent. C) falls 2.5 percent. D) rises 2.5 percent. E) rises 0.25 percent. 119) The price elasticity of demand is a measure of the extent to which the quantity demanded of a good changes when ________ changes and all other influences on buyers’ plans remain the same. A) income B) the price of a related good C) the price of the good D) the demand alone E) both the demand and the supply simultaneously 120) Suppose the price of a movie falls from $9 to $7. Using the midpoint method, what is the percentage change in price? A) 33 percent B) -33 percent C) 25 percent D) -25 percent E) -97 percent