Summary for chapter 5 Elasticity and its Application
Elasticity and Its Application弹性及其应用
Perfectly Inelastic Demand— Elasticity equals 0
完全无弹性的需求——弹性等于0
Price 价格
$5 1. An increase in price... 4 1.价格上 升…
Demand 需求
Quantity 数量 100 2. ...leaves the quantity Lou,Fangdemanded unchanged. School of Economics,SHUFE 2….需求量不变。
Lou,Fang School of Economics,SHUFE
总收益与需求的价格弹性
（1）总收益：TR= P x Q
（2）需求价格弹性的变动程度决定了总收益的变 动。
如果需求缺乏弹性，价格上升引起总收益增加。 如果需求富有弹性，价格上升引起总收益减少。
Lou,Fang School of Economics,SHUFE
Elasticity and Its Application 弹性及其应用
Chapter 5
Lou,Fang School of Economics,SHUFE
第5章 弹性及其应用 （The Theory of Elasticity）
弹性的概念：是衡量买者和卖者对市场条 件变动反应大小的指标，使我们更精确地 分析供给和需求。 当研究某个事件或政策对市场的影响时， 我们要考虑的不仅是影响方向，同时也要 考虑影响程度。 以前对物品的供给和需求是从定性转向了 定量。
图3.总收益如何随着价格变化而变化： 缺乏弹性的需求
价格 价格
价格从1美元上升到3 美元...
…导致总收益从100美 元增加到240美元
曼昆经济学原理英文版答案
曼昆经济学原理英文版答案As the creator of the Baidu Wenku document "Principles of Economics by Mankiw (English Version) Answers", I would like to provide a comprehensive guide to the solutions of the questions in the book. This document aims to help students better understand the principles of economics and improve their problem-solving abilities.Chapter 1: Ten Principles of Economics。
1. People face trade-offs.2. The cost of something is what you give up to get it.3. Rational people think at the margin.4. People respond to incentives.5. Trade can make everyone better off.6. Markets are usually a good way to organize economic activity.7. Governments can sometimes improve economic outcomes.8. The standard of living depends on a country's production.9. Prices rise when the government prints too much money.10. Society faces a short-run trade-off between inflation and unemployment.Chapter 2: Thinking Like an Economist。
ch05_Elasticity_and_Its_Applications弹性
What determines price elasticity?
To learn the determinants of price elasticity, we look at a series of examples. Each compares two common goods. In each example:
CHAPTER 5 ELASTICITY AND ITS APPLICATION 2
Price Elasticity of Demand
Price elasticity of demand Percentage change in Qd
=
Percentage change in P
Price elasticity of demand measures how
P P2 P1 D Q2 Q1 Q
Along a D curve, P and Q move in opposite directions, which would make price elasticity negative.
We will drop the minus sign and report all price elasticities (except cross-price elasticities) as positive numbers.
• What lesson does the example teach us about the
determinants of the price elasticity of demand?
CHAPTER 5 ELASTICITY AND ITS APPLICATION 12
EXAMPLE 1:
微观经济学chapter5弹性及其应用
总结：有相近替代品的物品的需求往往较富有 弹性
• 2、必需品与奢侈品：取决于消费者偏好 游艇，大米
总结：必需品的需求往往缺乏弹性，而奢侈品 的需求往往富有弹性
经验之谈
• 3、市场的定义
粮食 可乐 百事 、可口可乐 • 总结：任何一个市场上的需求弹性都取决于我们所划 定的市场范围。范围越小越富有弹性
(108)
(108)/2 (2.202.00)
22percent2.32 9.5percent
(2.002.20)/2
学以致用：运用中点法
考虑某商品的价格从90上升到110时，其需求量从 240下降到160的情况 • 价格变动的百分比为
▫ ( P1－Po)÷(P1+Po)/2=(110－90)÷（90+110）/2=20%
3. 胰岛素，阿司匹林
• 阿司匹林，因为它有替代品，而胰岛素没有替代品
Step 2 how
• 怎么计算需求价格弹性？
需求价格弹性
一种物品需求量对其价格变动反应 程度的衡量，用需求量变动的百分比除 以价格变动的百分比来计算
需求价格弹=性需价求格量变变动动的的百百分分比比
需求价格弹性 ED 的计算
• 4、时间框架
比如汽油价格上涨，在最初的几个月中，汽油的 需求量只是略微减少。
长期 人们会购买更省油的汽车，或转乘公交，或搬 离工作地点近的汽车。（美国汽车大排量，日本汽车 小排量） • 总结：物品的需求往往在长期内更富有弹性
需求价格弹性及其决定因素
1. 必需程度 ：
• 奢侈品的弹性大 • 必需品的弹性小
• 由于利比亚战争，世界石油需求大国-中国经济 繁盛，或者是通过了新的燃油税，导致汽油价格 上升。消费者对价格上升做出什么反应呢？
曼昆_经济学原理答案_英文版chp5
Chapter 5Elasticity and its applicationSolutions to text problemsprice elasticity of demand. Explain the relationship between total QZ Definerevenue and the price elasticity of demand. (page 92)The price elasticity of demand is a measure of how much the quantity demanded of a good responds to a change in the price of that good, calculated as the percentage change in quantity demanded divided by the percentage change in price.The relationship between total revenue and the price elasticity of demand is: (1) when a demand curve is inelastic (a price elasticity less than 1), a price increase raises total revenue, and a price decrease reduces total revenue; (2) when a demand curve is elastic (a price elasticity greater than 1), a price increase reduces total revenue, and a price decrease raises total revenue; and (3) when a demand curve is unit elastic (a price elasticity equal to 1), a change in price does not affect total revenue.price elasticity of supply. Explain why the price elasticity of supply QZ Definemight be different in the long run than in the short run. (page 94)The price elasticity of supply is a measure of how much the quantity supplied of a good responds to a change in the price of that good, calculated as the percentage change in quantity supplied divided by the percentage change in price.The price elasticity of supply might be different in the long run than in the short run because over short periods of time, firms cannot easily change the size of their factories to make more or less of a good. Thus, in the short run, the quantity supplied is not very responsive to the price. However, over longer periods, firms can build new factories or close old ones, or they can enter or exit a market. So, in the long run, the quantity supplied can respond substantially to the price.QZ How might a drought that destroys half of all farm crops be good for farmers? If such a drought is good for farmers, why don’t farmers destroy their own crops in the absence of a drought? (page 100)A drought that destroys half of all farm crops could be good for farmers if the demand for the crops is inelastic. The shift to the left of the supply curve leads to a price increase that raises total revenue because the price elasticity is less than one.Even though a drought could be good for farmers, they wouldn’t destroy their crops in the absence of a drought because no one farmer would have an incentive to destroy her crops, since she takes the market price as given. Only if all farmers destroyed their crops together, for example through a government program, would this plan work to make farmers better off.Questions for review (page 101)1The price elasticity of demand measures how much the quantity demanded responds to a change in price. The income elasticity of demand measures how much the quantity demanded changes as consumer income changes.2The determinants of the price elasticity of demand include whether the good is a necessity or a luxury, how available close substitutes are, how broadly defined the market is, and the time horizon.Luxury goods have greater price elasticity than necessities, goods with close substitutes have greater elasticity, goods in more narrowly defined markets have greater elasticity, and goods have greater elasticity the longer the time horizon.3Elasticity greater than 1 means demand is elastic. When the elasticity is greater than 1, the percentage change in quantity demanded exceeds the percentage change in price. When the elasticity60 Principles of Economics, Third edition, Instructor’s Manualequals 0, demand is perfectly inelastic. There is no change in quantity demanded when there is a change in price.4Figure 5.1 presents a supply-and-demand diagram, showing equilibrium price, equilibrium quantity, total spending by consumers and the total revenue received by producers. Total spending byconsumers equals the equilibrium price times the equilibrium quantity. Total revenue received by producers also equals the equilibrium price times the equilibrium quantity. These are shown by the area of the rectangle in Figure 5.1.Figure 5.15If demand is elastic, an increase in price reduces total revenue. With elastic demand, the quantity demanded falls by a greater percentage than the percentage increase in price. As a result, total revenue declines.6 A good with an income elasticity less than 0 is called an inferior good because as income rises, thequantity demanded declines.Chapter 5: Elasticity and its application 61 7The price elasticity of supply is calculated as the percentage change in quantity supplied divided by percentage change in price.Price elasticity of supply =% change in quantity supplied % change in priceIt measures how much the quantity supplied responds to changes in the price.8The price elasticity of supply of Picasso paintings is zero, since no matter how high price rises, no more can ever be produced.9The price elasticity of supply is usually larger in the long run than it is in the short run. Over short periods of time, firms cannot easily change the size of their factories to make more or less of a good, so the quantity supplied is not very responsive to price. Over longer periods, firms can build new factories or close old ones, so the quantity supplied is more responsive to price.10OPEC was unable to maintain a high price through the 1980s because the elasticity of supply and demand were more elastic in the long run. When the price of oil rose, producers of oil outside of OPEC increased oil exploration and built new extraction capacity. Consumers responded withgreater conservation efforts. As a result, supply increased and demand fell, leading to a lower price for oil in the long run.Problems and applications (page 102)1 a Mystery novels have more elastic demand than required textbooks, because mystery novels haveclose substitutes and are more of a luxury good, while required textbooks are more of a necessity with no close substitutes. If the price of mystery novels were to rise, readers could substituteother types of novels, or buy fewer novels altogether. But if the price of required textbooks were to rise, students would have little choice but to pay the higher price. Thus the quantity demanded of required textbooks is less responsive to price than the quantity demanded of mystery novels.b Beethoven recordings have more elastic demand than classical music recordings in general.Beethoven recordings are a narrower market than classical music recordings, so it is easy to find close substitutes for them. If the price of Beethoven recordings were to rise, people couldsubstitute other classical recordings, like Mozart. But if the price of all classical recordings were to rise, substitution would be more difficult. A transition from classical music to hip-hop, forexample, is less likely. Thus the quantity demanded of classical recordings is less responsive to price than the quantity demanded of Beethoven recordings.c Heating oil during the next 5 years has more elastic demand than heating oil during the next 6months. Goods have a more elastic demand over longer time horizons. If the price of heating oil were to rise temporarily, consumers couldn’t switch to other sources of fuel without greatexpense. But if the price of heating oil were to be high for a long time, people would gradually switch to gas or electric heat. As a result, the quantity demanded of heating oil during the next 6 months is less responsive to price than the quantity demanded of heating oil during the next 5years.d Lemonade has more elastic demand than water. Lemonade is a luxury with close substitutes,while water is a necessity with no close substitutes. If the price of water were to rise, consumers have little choice but to pay the higher price. But if the price of lemonade were to rise,consumers could easily switch to other soft drinks. So the quantity demanded of lemonade ismore responsive to price than the quantity demanded of water.2 a(i) For business travellers, the price elasticity of demand when the price of tickets risesfrom $200 to $250 is [(2,000 – 1,900)/1,950]/[(250 – 200)/225] = 3/13 = 0.23.(ii) For holiday-makers, the price elasticity of demand when the price of tickets risesfrom $200 to $250 is [(800 – 600)/700] / [(250 – 200)/225] = 9/7 = 1.29.b The price elasticity of demand for holiday-makers is higher than the elasticity for businesstravellers because holiday-makers can more easily choose a different mode of transportation like driving or taking the train. Business travellers are less likely to do so since time is moreimportant to them and their schedules are less adaptable.62 Principles of Economics, Third edition, Instructor’s Manual3 a(i) If your income is $10,000, your price elasticity of demand as the price of compactdiscs rises from $8 to $10 is [(40 – 32)/36] / [(10 – 8)/9] = 1(ii) If your income is $12,000, the elasticity is [(50 – 45)/47.5] / [(10 – 8)/9] = 9/19 =0.47b(i) If the price is $12, your income elasticity of demand as your income increases from $10,000 to $12,000 is [(30 – 24)/27] / [(12,000 – 10,000)/11,000] = 11/9 = 1.22.(ii) If the price is $16, your income elasticity of demand as your income increases from $10,000 to $12,000 is [(12 – 8)/10] / [(12,000 – 10,000)/11,000] = 11/5 = 2.2.4 a If Emily always spends one-third of her income on clothing, then her income elasticityof demand is one, since maintaining her clothing expenditures as a constant fraction ofher income means the percentage change in her quantity of clothing must equal herpercentage change in income. For example, suppose the price of clothing is $30, herincome is $9,000, and she purchases 100 clothing items. If her income rose 10 percentto $9,900, she’d spend a total of $3,300 on clothing, which is 110 clothing items, a 10percent increase.b Emily’s price elasticity of clothing demand is also one, since every percentage point increase inthe price of clothing would lead her to reduce her quantity purchased by the same percentage.Again, suppose the price of clothing is $30, her income is $9,000, and she purchases 100clothing items. If the price of clothing rose 1 percent to $30.30, she would purchase 99 clothing items, a 1 percent reduction. Note this part of the problem can be confusing to students if theyhave an example with a larger percentage change and they use the point elasticity calculationmethod. This example can be used to further illustrate the usefulness of the midpoint method for any size change.c Since Emily spends a smaller proportion of her income on clothing, then for any given price, herquantity demanded will be lower. Thus her demand curve has shifted to the left. But becauseshe’ll again spend a constant fraction of her income on clothing, her income and price elasticities of demand remain one.5 a With a 4.3 percent decline in quantity following a 20 percent increase in price, theprice elasticity of demand is only 4.3/20 = 0.215, which is fairly inelastic.b With inelastic demand, the revenue rises when the fare rises.c The elasticity estimate might be unreliable because it’s only the first month after the fareincrease. As time goes by, people may switch to other means of transportation in response to the price increase. So the elasticity may be larger in the long run than it is in the short run.6Tom’s price elasticity of demand is zero, since he wants the same quantity regardless of the price.Jerry’s price elasticity of demand is one, since he spends the same amount on gas, no matter what the price, which means his percentage change in quantity is equal to the percentage change in price.7To explain the observation that spending on restaurant meals declines more during economic downturns than does spending on food to be eaten at home, economists look at the income elasticity of demand. In economic downturns, people have lower income. To explain the observation, the income elasticity of restaurant meals must be larger than the income elasticity of spending on food to be eaten at home.8 a With a price elasticity of demand of 0.4, reducing the quantity demanded of cigarettes by 20percent requires a 50 percent increase in price, since 20/50 = 0.4. With the price of a pack ofcigarettes currently at $8, this would require an increase in the price to $13.33 a pack using the midpoint method (note that ($13.33 – $8)/$10.67 = 0.50).b The policy will have a larger effect five years from now than it does one year from now. Theelasticity is larger in the long run, since it may take some time for people to reduce theircigarette usage. The habit of smoking is hard to break in the short run.c Since teenagers don’t have as much income as adults, they are likely to have a higher priceelasticity of demand.9You’d expect the price elasticity of demand to be higher in the market for vanilla ice cream than for all ice cream because vanilla ice cream is a narrower category and other flavours of ice cream are almost perfect substitutes for vanilla.Chapter 5: Elasticity and its application 63 You’d expect the price elasticity of supply to be larger for vanilla ice cream than for all ice cream. A producer of vanilla ice cream could easily adjust the quantity of vanilla ice cream and produce other types of ice cream. But a producer of ice cream would have a more difficult time adjusting the overall quantity of ice cream they produced.10 a As Figure 5.2 shows, in both markets, the increase in supply reduces the equilibrium price andincreases the equilibrium quantity.b In the market for pharmaceutical drugs, with inelastic demand, the increase in supply leads to arelatively large decline in the price and not much of an increase in quantity. This marketexperiences a larger change in price.Figure 5.2c In the market for computers, with elastic demand, the increase in supply leads to a relativelylarge increase in quantity and not much of a decline in price. This market experiences a largerchange in quantity.d In the market for pharmaceutical drugs, since demand is inelastic, the percentage increase inquantity will be less than the percentage decrease in price, so total consumer spending willdecline. In contrast, since demand is elastic in the market for computers, the percentage increase in quantity will be greater than the percentage decrease in price, so total consumer spending will increase.11 a As Figure 5.3 shows, in both markets, the increase in demand increases both the equilibriumprice and the equilibrium quantity.b In the market for beachfront resorts, with inelastic supply, the increase in demand leads to arelatively large increase in the price and not much of an increase in quantity. This marketexperiences a larger change in price.c In the market for cars, with elastic supply, the increase in demand leads to a relatively largeincrease in quantity and not much of an increase in price. This market experiences a largerchange in quantity.d In both markets, total consumer spending rises, since both equilibrium price and equilibriumquantity rise.64 Principles of Economics, Third edition, Instructor’s Manual Figure 5.3Quantity of cars 12 a Vineyard owners whose vines weren’t destroyed benefited because the destruction of some ofthe vines reduced the supply, causing the equilibrium price to rise.b To tell whether vineyard owners as a group were hurt or helped by the floods, you’d need toknow the price elasticity of demand. It could be that the additional income earned by vineyard owners whose vines weren’t destroyed rose more because of the higher prices than the lossesmade by vineyard owners whose vines were destroyed, if demand is inelastic.13 A worldwide drought could increase the total revenue of farmers if the price elasticity of demand forgrain is inelastic. The drought reduces the supply of grain, but if demand is inelastic, the reduction of supply causes a large increase in price. Total farm revenue would rise as a result. If there’s only a drought in Queensland, Queensland’s production isn’t a large enough proportion of the total farm product to have much impact on the price. As a result, price is basically unchanged, while the output of Queensland farmers declines, thus reducing their income.14 When productivity increases for all farmland at a point in time, the increased productivity leads to arise in farmland prices, since more output can be produced on a given amount of land. But prior to the technological improvements, the productivity of farmland depended mainly on the prevailing weather conditions. There was little opportunity to substitute land with worse weather conditions for land with better weather conditions. As technology improved over time, it became much easier to substitute one type of land for another. So the price elasticity of supply for farmland increased over time, since now land with bad weather is a better substitute for land with good weather. Theincreased supply of land reduced farmland prices. As a result, productivity and farmland prices are negatively related over time.15 Not necessarily. If demand for luxury cars is price elastic, then raising the price of luxury cars byincreasing the tax will decrease the total revenue from luxury cars. It is likely that demand for luxury cars is elastic as they are more of a luxury than a necessity. P r i c e o f c a r s。
summaryofUnit5-副本
summaryofUnit5-副本Unit 5 Constructing Noun PhrasesKey points and exam question typesKey points:1 The structure of a noun phraseKnow the structure of a noun phrase and be able to write correct noun phrases with various modifiers.2 The relative clauseKnow the functions of the relative clause and be able to combine sentences by using relative clauses.Exam question types1 Arrange all the given words in each group into a noun phrase. Do not make any changes in the form of the words.Examples:Questions:1 corner, the, the, girl, standing, tall, in2 class, the, of, students, our, all, boy3 criticism, his, hostile, of, Mary’s, novel4 damaged, been, a, has, vase, that, beautiful5 books, four, the, published, grammar, recentlyAnswers:1 the tall girl standing in the corner2 all the boy students of our class3 Mary’s hostile criticism of his novel / his hostile criticism of Mary’s novel4 a beautiful vase that has been damaged5 the four grammar books recently published / the four grammar books published recently / the four recently published grammar books2 Join the two sentences in each pair by changing the SECOND sentence into a relative clause. Make sure you know whether the relative clause should be restrictive or non-restrictive and punctuate correctly.Examples:Questions:1 The problem today is to build flats at a price. Young couples can afford this price.2 He was asking questions. There were no answers to them.3 I gave him a large glass of whisky. He drank it immediately.4 The place has become very dirty and smelly. They dump rubbish in the place.5 The meeting was put off. That was exactly what he wanted.Answers:1 The problem today is to build flats at a price (that/which) young couples can afford.2 He was asking questions to which there were no answers.3 I gave him a large glass of whisky, which he drank immediately.4 The place where/in which they dump rubbish has become very dirty and smelly. / The place they dump rubbish in has become very dirty and smelly.5 The meeting was put off, which was exactly what he wanted.。
经原第五章习题与参考答案
C hapter FiveElasticity and Its Application一、名词解释（SOLUTIONS TO Key Concepts):1. elasticity弹性指的是一个变量变化的百分比与引起这种变化的变量变动百分比的比值。
例如，如果X 的变化引起了Y 的变化，则Y 对X 的弹性就是Y 变动的百分比除以X 变动的百分比的值。
经济学中的弹性以需求弹性为基础，它是收入弹性和其他等一系列弹性的合集。
需求弹性概念用于描述需求曲线的特性。
即用于描述价格变动对需求量的影响--价格变动时需求量扩张的范围。
在处理需求曲线时，运用弹性概念最重要的理由之一是，它提供了揭示总收益变动最适合的方法。
2. price elasticity of demand需求的价格弹性。
需求的价格弹性是被用来衡量商品需求量的变动对于商品自身价格 变动反应的敏感程度。
根据需求定理，在其他条件不变的情况下，需求量随价格的变动而变动，但变动方向相反。
在价格上升或下降后，需求量减少或增加的幅度会因商品种类的不同而不同、有的商品价格稍有变化，需求量就会发生很大的变化。
这种情况表明，需求量对价格变动的相对反应是非常敏感的。
而有的商品，价格比较大幅度的变动，只会使需求量发生相对较小的变化。
也就是说，需求量对价格变动反应并不是特别敏感。
有的商品，价格上涨的幅度与需求量减少的幅度相同。
两个百分率的变化恰好相等:也有的商品，价格变化后，需求量并不发生任何变动。
需求的价格弹性的概念就是用来说明和区别上述诸种情况，需求的价格弹性是通过需求量变动的比率同价格变动的比率的比较而确定的，是一个用来表示需求量这一变量对另一个变量价格的微小的百分率变化所做出的反应程度的概念。
通常以价格变动的百分率去除需求量变动的百分率表示。
这两个变动的百分率比值，称为价格需求弹性系数，即:需求弹性系数=需求量变动的百分率/价格变动的百分率。
3. total revenue总收益指的是某种商品在市场上买者支付的量或者卖者得到的量，它等于均衡状态下这种物品的价格和数量的乘积。
曼昆经济学原理英文版文案加习题答案5章ELASTICITY AND ITS APPLICATION
5ELASTICITY AND ITS APPLICATION WHAT’S NEW IN THE S EVENTH EDITION:There are no major changes to this chapter.LEARNING OBJECTIVES:By the end of this chapter, students should understand:the meaning of the elasticity of demand.what determines the elasticity of demand.the meaning of the elasticity of supply.what determines the elasticity of supply.the concept of elasticity in three very different markets (the market for wheat, the market for oil, and the market for illegal drugs).CONTEXT AND PURPOSE:Chapter 5 is the second chapter of a three-chapter sequence that deals with supply and demand and how markets work. Chapter 4 introduced supply and demand. Chapter 5 shows how much buyersand sellers respond to changes in market conditions. Chapter 6 will address the impact of government polices on competitive markets.The purpose of Chapter 5 is to add precision to the supply-and-demand model. We introduce the concept of elasticity, which measures the responsiveness of buyers and sellers to changes in economic variables such as prices and income. The concept of elasticity allows us to make quantitative observations about the impact of changes in supply and demand on equilibrium prices and quantities.KEY POINTS:The price elasticity of demand measures how much the quantity demanded responds to changes in the price. Demand tends to be more elastic if close substitutes are available, if the good is a luxury rather than a necessity, if the market is narrowly defined, or if buyers have substantial time to react to a price change.The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. If quantity demanded moves proportionately less than the price, then the elasticity is less than one, and demand is said to be inelastic.If quantity demanded moves proportionately more than the price, then the elasticity is greater than one, and demand is said to be elastic.Total revenue, the total amount paid for a good, equals the price of the good times the quantity sold. For inelastic demand curves, total revenue moves in the same direction as the price. For elastic demand curves, total revenue moves in the opposite direction as the price.The income elasticity of demand measures how much the quantity demanded responds tochanges in consumers’ income. The cross-price elasticity of demand measures how much the quantity demanded of one good responds to the price of another good.The price elasticity of supply measures how much the quantity supplied responds to changes in the price. This elasticity often depends on the time horizon under consideration. In most markets, supply is more elastic in the long run than in the short run.The price elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in price. If quantity supplied moves proportionately less than the price, then the elasticity is less than one, and supply is said to be inelastic.If quantity supplied moves proportionately more than the price, then the elasticity is greater than one, and supply is said to be elastic.The tools of supply and demand can be applied in many different kinds of markets. This chapter uses them to analyze the market for wheat, the market for oil, and the market for illegal drugs.CHAPTER OUTLINE:I. The Elasticity of DemandA. Definition of elasticity: a measure of the responsiveness of quantity demanded orquantity supplied to one of its determinants.B. The Price Elasticity of Demand and Its Determinants1. Definition of price elasticity of demand: a measure of how much the quantitydemanded of a good responds to a change in the price of that good, computed as thepercentage change in quantity demanded divided by the percentage change in price.2. Determinants of the Price Elasticity of Demanda. Availability of Close Substitutes: the more substitutes a good has, the moreelastic its demand.b. Necessities versus Luxuries: necessities are more price inelastic.c. Definition of the market: narrowly defined markets (ice cream) have moreelastic demand than broadly defined markets (food).d. Time Horizon: goods tend to have more elastic demand over longer time horizons.C. Computing the Price Elasticity of Demand1. Formula2. Example: the price of ice cream rises by 10% and quantity demanded falls by 20%.Price elasticity of demand = (20%)/(10%) = 23. Because there is an inverse relationship between price and quantity demanded (theprice of ice cream rose by 10% and the quantity demanded fell by 20%), the price elasticity of demand is sometimes reported as a negative number. We will ignorethe minus sign and concentrate on the absolute value of the elasticity.D. The Midpoint Method: A Better Way to Calculate Percentage Changes and Elasticities1. Because we use percentage changes in calculating the price elasticity of demand,the elasticity calculated by going from one point to another on a demand curvewill be different from an elasticity calculated by going from the second point tothe first. This difference arises because the percentage changes are calculatedusing a different base.a. A way around this problem is to use the midpoint method.b. Using the midpoint method involves calculating the percentage change in eitherprice or quantity demanded by dividing the change in the variable by themidpoint between the initial and final levels rather than by the initial levelitself.c. Example: the price rises from $4 to $6 and quantity demanded falls from 120 to80.% change in price = (6 −4)/5 × 100 = 40%% change in quantity demanded = (120 − 80)/100 x 100 = 40%price elasticity of demand = 40/40 = 1E. The Variety of Demand Curves1. Classification of Elasticitya. When the price elasticity of demand is greater than one, demand is defined tobe elastic.b. When the price elasticity of demand is less than one, the demand is defined tobe inelastic.c. When the price elasticity of demand is equal to one, the demand is said to haveunit elasticity.2. In general, the flatter the demand curve that passes through a given point, themore elastic the demand.3. Extreme Casesa. When the price elasticity of demand is equal to zero, the demand is perfectlyinelastic and is a vertical line.b. When the price elasticity of demand is infinite, the demand is perfectlyelastic and is a horizontal line.4. FYI: A Few Elasticities from the Real WorldF. Total Revenue and the Price Elasticity of Demand1. Definition of total revenue: the amount paid by buyers and received by sellers ofa good, computed as the price of the good times the quantity sold.2. If demand is inelastic, the percentage change in price will be greater than thepercentage change in quantity demanded.a. If price rises, quantity demanded falls, and total revenue will rise (becausethe increase in price will be larger than the decrease in quantity demanded).b. If price falls, quantity demanded rises, and total revenue will fall (becausethe fall in price will be larger than the increase in quantity demanded).3. If demand is elastic, the percentage change in quantity demanded will be greaterthan the percentage change in price.a. If price rises, quantity demanded falls, and total revenue will fall (becausethe increase in price will be smaller than the decrease in quantity demanded).b. If price falls, quantity demanded rises, and total revenue will rise (becausethe fall in price will be smaller than the increase in quantity demanded).4. If demand is unit elastic, the percentage change in price will be equal to thepercentage change in quantity demanded.a. If price rises, quantity demanded falls, and total revenue will remain the same(because the increase in price will be equal to the decrease in quantitydemanded).b. If price falls, quantity demanded rises, and total revenue will remain the same(because the fall in price will be equal to the increase in quantity demanded).G. Elasticity and Total Revenue along a Linear Demand Curve1. The slope of a linear demand curve is constant, but the elasticity is not.a. At points with a low price and a high quantity demanded, demand is inelastic.b. At points with a high price and a low quantity demanded, demand is elastic.2. Total revenue also varies at each point along the demand curve.H. Other Demand Elasticities1. Definition of income elasticity of demand: a measure of how much the quantitydemanded of a good responds to a change in consumers’ income, computed as the percentage change in quantity demanded divided by the percentage change in income.a. FormulaFigure 4Note that when demand is elastic and price falls, total revenue rises. Also point out that once demand is inelastic, any further decrease in price% change in quantity demandedIncome elasticity of demand =% change in incomeb. Normal goods have positive income elasticities, while inferior goods havenegative income elasticities.ALTERNATIVE CLASSROOM EXAMPLE:John’s income rises from $20,000 to $22,000 and the quantity of hamburger he buyseach week falls from 2 pounds to 1 pound.% change in quantity demanded = (1−2)/ x 100 = %% change in income = (22,000 −20,000)/21,000 x 100 = %c. Necessities tend to have small income elasticities, while luxuries tend to havelarge income elasticities.2. Definition of cross-price elasticity of demand: a measure of how much the quantitydemanded of one good responds to a change in the price of another good, computedas the percentage change in the quantity demanded of the first good divided by the percentage change in the price of the second good.a. Formulab. Substitutes have positive cross-price elasticities, while complements havenegative cross-price elasticities.ALTERNATIVE CLASSROOM EXAMPLE:The price of apples rises from $ per pound to $ per pound. As a result, thequantity of oranges demanded rises from 8,000 per week to 9,500.% change in quantity of oranges demanded = (9,500 − 8,000)/8,750 x 100 = %% change in price of apples = − / x 100 = 40%II. The Elasticity of SupplyA. The Price Elasticity of Supply and Its Determinants1. Definition of price elasticity of supply: a measure of how much the quantitysupplied of a good responds to a change in the price of that good, computed as thepercentage change in quantity supplied divided by the percentage change in price.2. Determinants of the Price Elasticity of Supplya. Flexibility of sellers: goods that are somewhat fixed in supply (beachfrontproperty) have inelastic supplies.b. Time horizon: supply is usually more inelastic in the short run than in thelong run.B. Computing the Price Elasticity of Supply1. Formula2. Example: the price of milk increases from $ per gallon to $ per gallon and thequantity supplied rises from 9,000 to 11,000 gallons per month.% change in price = –/ × 100 = 10%% change in quantity supplied = (11,000 –9,000)/10,000 × 100 = 20%Price elasticity of supply = (20%)/(10%) = 2C. The Variety of Supply Curves1. In general, the flatter the supply curve that passes through a given point, themore elastic the supply.2. Extreme Casesa. When the elasticity is equal to zero, the supply is said to be perfectlyinelastic and is a vertical line.b. When the elasticity is infinite, the supply is said to be perfectly elastic andis a horizontal line.3. Because firms often have a maximum capacity for production, the elasticity ofsupply may be very high at low levels of quantity supplied and very low at highlevels of quantity supplied.III. Three Applications of Supply, Demand, and ElasticityA. Can Good News for Farming Be Bad News for Farmers1. A new hybrid of wheat is developed that is more productive than those used in thepast. What happens2. Supply increases, price falls, and quantity demanded rises.3. If demand is inelastic, the fall in price is greater than the increase in quantitydemanded and total revenue falls.4. If demand is elastic, the fall in price is smaller than the rise in quantitydemanded and total revenue rises.5. In practice, the demand for basic foodstuffs (like wheat) is usually inelastic.a. This means less revenue for farmers.b. Because farmers are price takers, they still have the incentive to adopt thenew hybrid so that they can produce and sell more wheat.c. This may help explain why the number of farms has declined so dramatically overthe past two centuries.d. This may also explain why some government policies encourage farmers todecrease the amount of crops planted.B. Why Did OPEC Fail to Keep the Price of Oil HighFigure 8Short Run Long Run1. In the 1970s and 1980s, OPEC reduced the amount of oil it was willing to supply toworld markets. The decrease in supply led to an increase in the price of oil and a decrease in quantity demanded. The increase in price was much larger in the short run than the long run. Why2. The demand and supply of oil are much more inelastic in the short run than thelong run. The demand is more elastic in the long run because consumers can adjust to the higher price of oil by carpooling or buying a vehicle that gets bettermileage. The supply is more elastic in the long run because non-OPEC producerswill respond to the higher price of oil by producing more.C. Does Drug Interdiction Increase or Decrease Drug-Related Crime1. The federal government increases the number of federal agents devoted to the waron drugs. What happensa. The supply of drugs decreases, which raises the price and leads to a reductionin quantity demanded. If demand is inelastic, total expenditure on drugs (equalto total revenue) will increase. If demand is elastic, total expenditure willfall.b. Thus, because the demand for drugs is likely to be inelastic, drug-relatedcrime may rise.2. What happens if the government instead pursued a policy of drug educationa. The demand for drugs decreases, which lowers price and quantity supplied. Totalexpenditure must fall (because both price and quantity fall).b. Thus, drug education should not increase drug-related crime.SOLUTIONS TO TEXT PROBLEMS:Quick Quizzes1. The price elasticity of demand is a measure of how much the quantity demanded of agood responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price.When demand is inelastic (a price elasticity less than 1), a price increase raisestotal revenue, and a price decrease reduces total revenue. When demand is elastic (a price elasticity greater than 1), a price increase reduces total revenue, and a price decrease increases total revenue. When demand is unit elastic (a price elasticity equal to 1), a change in price does not affect total revenue.2. The price elasticity of supply is a measure of how much the quantity supplied of agood responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price.The price elasticity of supply might be different in the long run than in theshort run because over short periods of time, firms cannot easily change the sizes Figure 9(a) Drug Interdiction (b) Drug Educationof their factories to make more or less of a good. Thus, in the short run, thequantity supplied is not very responsive to the price. However, over longerperiods, firms can build new factories, expand existing factories, close oldfactories, or they can enter or exit a market. So, in the long run, the quantitysupplied can respond substantially to a change in price.3. A drought that destroys half of all farm crops could be good for farmers (at leastthose unaffected by the drought) if the demand for the crops is inelastic. Theshift to the left of the supply curve leads to a price increase that will raisetotal revenue if the price elasticity of demand is less than 1.No one farmer would have an incentive to destroy her crops in the absence of adrought because she takes the market price as given. Only if all farmersdestroyed a portion of their crops together, for example through a governmentprogram, would this plan work to make farmers better off.Questions for Review1. The price elasticity of demand measures how much quantity demanded responds to achange in price. The income elasticity of demand measures how much quantitydemanded responds to changes in consumers' income.2. The determinants of the price elasticity of demand include the availability ofclose substitutes, whether the good is a necessity or a luxury, the breadth of thedefinition of the market, and the time horizon. Goods with close substitutes havegreater elasticities, luxury goods have greater price elasticities thannecessities, goods in more narrowly defined markets have greater elasticities, andthe elasticity of demand is greater the longer the time horizon.3. An elasticity greater than one means that demand is elastic. When the elasticityis greater than one, the percentage change in quantity demanded exceeds thepercentage change in price. When the elasticity equals zero, demand is perfectly inelastic. There is no change in quantity demanded when there is a change in price.4. Figure 1 presents a supply-and-demand diagram, showing the equilibrium price, P,the equilibrium quantity, Q, and the total revenue received by producers. Total revenue equals the equilibrium price times the equilibrium quantity, which is the area of the rectangle shown in the figure.Figure 15. If demand is elastic, an increase in price reduces total revenue. With elasticdemand, the quantity demanded falls by a greater percentage than the price rises.As a result, total revenue moves in the opposite direction as the price. Thus, if price rises, total revenue falls.6. A good with income elasticity less than zero is called an inferior good because asincome rises, the quantity demanded declines.7. The price elasticity of supply is calculated as the percentage change in quantitysupplied divided by the percentage change in price. It measures how much quantity supplied responds to changes in price.8. If a fixed quantity of a good is available and no more can be made, the priceelasticity of supply is zero. Regardless of the percentage change in price, therewill be no change in the quantity supplied.9. Destruction of half of the fava bean crop is more likely to hurt fava bean farmersif the demand for fava beans is very elastic. Destruction of half of the cropcauses the supply curve to shift to the left resulting in a higher price of favabeans. When demand is very elastic, an increase in price leads to a decrease intotal revenue because the decrease in quantity demanded outweighs the increase inprice.Quick Check Multiple Choice1. a2. b3. d4. c5. a6. cProblems and Applications1. a. Mystery novels have more elastic demand than required textbooks because mysterynovels have close substitutes and are a luxury good, while required textbooksare a necessity with no close substitutes. If the price of mystery novels wereto rise, readers could substitute other types of novels, or buy fewer novelsaltogether. But if the price of required textbooks were to rise, students wouldhave little choice but to pay the higher price. Thus, the quantity demanded ofrequired textbooks is less responsive to price than the quantity demanded ofmystery novels.b. Beethoven recordings have more elastic demand than classical music recordingsin general. Beethoven recordings are a narrower market than classical musicrecordings, so it is easier to find close substitutes for them. If the price of Beethoven recordings were to rise, people could substitute other classicalrecordings, like Mozart. But if the price of all classical recordings were torise, substitution would be more difficult. (A transition from classical musicto rap is unlikely!) Thus, the quantity demanded of classical recordings isless responsive to price than the quantity demanded of Beethoven recordings.c. Subway rides during the next five years have more elastic demand than subwayrides during the next six months. Goods have a more elastic demand over longertime horizons. If the fare for a subway ride was to rise temporarily, consumers could not switch to other forms of transportation without great expense orgreat inconvenience. But if the fare for a subway ride was to remain high for a long time, people would gradually switch to alternative forms of transportation.As a result, the quantity demanded of subway rides during the next six monthswill be less responsive to changes in the price than the quantity demanded ofsubway rides during the next five years.d. Root beer has more elastic demand than water. Root beer is a luxury with closesubstitutes, while water is a necessity with no close substitutes. If the price of water were to rise, consumers have little choice but to pay the higher price.But if the price of root beer were to rise, consumers could easily switch toother sodas or beverages. So the quantity demanded of root beer is moreresponsive to changes in price than the quantity demanded of water.2. a. For business travelers, the price elasticity of demand when the price oftickets rises from $200 to $250 is [(2,000 – 1,900)/1,950]/[(250 – 200)/225]= = . For vacationers, the price elasticity of demand when the price oftickets rises from $200 to $250 is [(800 – 600)/700] / [(250 – 200)/225] == .b. The price elasticity of demand for vacationers is higher than the elasticityfor business travelers because vacationers can choose a substitute more easilythan business travelers. For example, vacationers can choose a different mode of transportation (like driving or taking the train), a different destination, a different departure date, and a different return date. They may also choose to not travel at all. Business travelers are less likely to do so because their schedules are less adaptable.3. a. The percentage change in price is equal to – / x 100 = 20%. If the priceelasticity of demand is , quantity demanded will fall by 4% in the short run [ ]. If the price elasticity of demand is , quantity demanded will fall by 14% in the long run [].b. Over time, consumers can make adjustments to their homes by purchasingalternative heat sources such as natural gas or electric furnaces. Thus, they can respond more easily to the change in the price of heating oil in the long run than in the short run.4. If quantity demanded fell, price must have increased according to the law ofdemand. For a price increase to increase total revenue, the percentage increase in the price must be greater than the percentage decline in quantity demanded. Therefore, demand is inelastic.5. , a. The effect on the market for coffee beans is shown in Figure 2. When ahurricane destroys half of the crop, the supply of coffee beans decreases, the price of coffee beans increases, and the quantity decreases.QuantityPrice Figure 2Demand S 1 S 2b. The effect on the market for cups of coffee is shown in Figure 2. When theprice of coffee beans, an important input into the production of a cup ofcoffee, increases, the supply of cups of coffee decreases, the price of a cup of coffee increases, and the quantity decreases.Because cups of coffee have an inelastic demand, when the price of a cup ofcoffee increases, the total expenditure on coffee increases.c. The effect on the market for donuts is shown in Figure 3. When the price ofcoffee increases and the quantity demanded of coffee decreases, consumersdemand fewer donuts because coffee and donuts are complements. When demanddecreases, the price of donuts decreases.Because donuts have an inelastic demand, when the price of donuts decreases,the total expenditure on donuts decreases.6. a. If your income is $10,000, your price elasticity of demand as the price of DVDsrises from $8 to $10 is [(40 – 32)/36]/[(10 – 8)/9] = = 1. If your income is $12,000, the elasticity is [(50 – 45)/]/[(10 – 8)/9] = = .b. If the price is $12, your income elasticity of demand as your income increasesfrom $10,000 to $12,000 is [(30 – 24)/27]/[(12,000 – 10,000)/11,000] = = . Price Figure 3If the price is $16, your income elasticity of demand as your income increases from $10,000 to $12,000 is [(12 – 8)/10]/[(12,000 – 10,000)/11,000] = = .7. a. If Maria always spends one-third of her income on clothing, then her incomeelasticity of clothing demand is one, because maintaining her clothingexpenditures as a constant fraction of her income means the percentage changein her quantity of clothing must equal her percentage change in income.b. Maria's price elasticity of clothing demand is also one, because everypercentage point increase in the price of clothing would lead her to reduce her quantity purchased by the same percentage.c. Because Maria spends a smaller proportion of her income on clothing, then forany given price, her quantity demanded will be lower. Thus, her demand curvehas shifted to the left. Because she will again spend a constant fraction ofher income on clothing, her income and price elasticities of demand remain one.8. a. The percentage change in price (using the midpoint formula) is – / × 100%= %. Therefore, the price elasticity of demand is = , which is very elastic.b. Because the demand is inelastic, the Transit Authority's revenue rises when thefare rises.c. The elasticity estimate might be unreliable because it is only the first monthafter the fare increase. As time goes by, people may switch to other means oftransportation in response to the price increase. So the elasticity may belarger in the long run than it is in the short run.9. Walt's price elasticity of demand is zero, because he wants the same quantityregardless of the price. Jessie's price elasticity of demand is one, because he spends the same amount on gas, no matter what the price, which means hispercentage change in quantity is equal to the percentage change in price.10. a. With a price elasticity of demand of , reducing the quantity demanded ofcigarettes by 20% requires a 50% increase in price, because 20/50 = . With the price of cigarettes currently $2, this would require an increase in the priceto $ a pack using the midpoint method (note that ($ – $2)/$ = .50).b. The policy will have a larger effect five years from now than it does one yearfrom now. The elasticity is larger in the long run, because it may take sometime for people to reduce their cigarette usage. The habit of smoking is hardto break in the short run.c. Because teenagers do not have as much income as adults, they are likely to havea higher price elasticity of demand. Also, adults are more likely to beaddicted to cigarettes, making it more difficult to reduce their quantitydemanded in response to a higher price.11. To determine whether you should increase or decrease the price of admissions, youneed to know if the demand is elastic or inelastic. If demand is elastic, adecline in the price of admissions will increase total revenue. If demand isinelastic, an increase in the price of admissions will cause total revenue to rise.12. A worldwide drought could increase the total revenue of farmers if the priceelasticity of demand for grain is inelastic. The drought reduces the supply of grain, but if demand is inelastic, the reduction of supply causes a large increase in price. Total farm revenue would rise as a result. If there is only a drought in Kansas, Kansas’ production is not a large enough proportion of the total farm product to have much impact on the price. As a result, price does not change (or changes by only a slight amount), while the output by Kansas farmers declines, thus reducing their income.。
曼昆经济学原理试题Chapter 05a
Chapter 5Elasticity and Its ApplicationsTest A1. In general, elasticity isa. a measure of the competitive nature of a market.b. the friction that develops between buyer and seller in a market.c. a measure of how much government intervention is prevalent in a market.d. a measure of how much buyers and sellers respond to changes in market conditions. TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y2. Demand is said to be elastic ifa. the price of the good responds substantially to changes in demand.b. the quantity demanded responds substantially to changes in the price of the good.c. buyers don’t respond much to changes in the price of the good.d. demand shifts substantially when the price of the good changes.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y3. Demand for a good would tend to be more elastic, thea. longer the period of time considered.b. greater the availability of complements.c. broader the definition of the market.d. fewer substitutes there are.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y4. Economists compute the price elasticity of demand asa. percentage change in the price divided by the percentage change in quantity demanded.b. change in quantity demanded divided by the change in the price.c. percentage change in the quantity demanded divided by the percentage change in price.d. percentage change in the quantity demanded divided by the percentage change in income. TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y5. If there are very few, if any, good substitutes for good A, thena. supply of good A would tend to be price elastic.b. demand for good A would tend to be price inelastic.c. demand for good A would tend to be price elastic.d. demand for good A would tend to be income elastic.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y6. Suppose the price of product X is reduced from $1.45 to $1.25 and, as a result, the quantity of Xdemanded increases from 2,000 to 2,200. Using the midpoint method, the price elasticity of demand for X in the given price range isa. 0.64.b. 1.00.c. 1.55.d. 2.00.TYPE: M KEY1: G SECTION: 1 OBJECTIVE: 2 RANDOM: Y46 Chapter 5/Elasticity and Its Applications7. The main reason for using the midpoint method is that ita. uses fewer numbers.b. rounds prices to the nearest dollar.c. gives the same answer regardless of the direction of change.d. rounds quantities to the nearest whole unit.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y8. If the demand curve is linear and downward sloping, which of the following would NOT be correct?a. Elasticity will change with a movement down the curve.b. The upper part of the demand curve is more elastic than the lower part.c. The lower part of the demand curve would be less elastic than the upper part.d. Elasticity and slope would both remain constant along the curve.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y9. Demand is elastic if elasticity isa. equal to 0.b. equal to 1.c. less than 1.d. greater than 1.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y10. In the graph shown, the section of the demand curve labeled A represents thea. elastic section of the demand curve.b. inelastic section of the demand curve.c. unit elastic section of the demand curve.d. perfectly elastic section of the demand curve.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: YChapter 5/Elasticity and Its Applications 4711. On the graph shown, the elasticity of demand from point B to point C, using the midpoint methodwould bea. 1.3.b. 1.0.c. 0.75.d. 0.50.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y12. A perfectly elastic demand implies thata. buyers will not respond to any change in price.b. price and quantity demanded respond proportionally.（成比例地）c. price will rise by an infinite amount when there is a change in quantity demanded.d. any rise in price above that represented by the demand curve will result in no outputdemanded.demanded.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y13. On a downward-sloping, linear demand curve, total revenue would be at a maximum at thea. upper end of the demand curve.b. midpoint of the demand curve.（画图）c. lower end of the demand curve.d. It is impossible to tell without knowing the price and quantity demanded.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y14. When demand is inelastic, a decrease in price will causea. no change in total revenue.b. an increase in total revenue.c. a decrease in total revenue.d. There is insufficient information to answer this question.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y15. The local pizza restaurant makes such great bread sticks that consumers do not respond much to achange in the price. If the owner is only interested in increasing revenue, he shoulda. reduce costs.b. lower the price of the bread sticks.c. raise the price of the bread sticks.d. leave the price of the bread sticks alone.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y48 Chapter 5/Elasticity and Its Applications16. If a change in the price of a good results in no change in total revenue,a. the demand for the good must be elastic.b. the demand for the good must be unit elastic.c. the demand for the good must be inelastic.d. buyers must not respond very much to a change in price.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y17. Assume that a 4 percent increase in income results in a 2 percent increase in the quantity demandedof a good. The income elasticity of demand for the good isa. positive and therefore the good is a normal good.b. negative and therefore the good is an inferior good.c. negative and therefore the good is a normal good.d. positive and therefore the good is an inferior good.TYPE: M KEY1: E SECTION: 1 OBJECTIVE: 2 RANDOM: Y18. Cross-price elasticity of demand measures how thea. quantity demanded of a good changes as price changes.b. quantity demanded of a good changes as income changes.c. price of a good is affected when income changes.d. quantity demanded of one good changes as the price of another good changes.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y19. The price elasticity of supply measures how mucha. the quantity supplied responds to changes in the price of the good.b. the quantity supplied responds to changes in input prices.c. the price of the good responds to changes in supply.d. sellers respond to changes in technology.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: Y20. The main determinant of the price elasticity of supply isa. time.b. luxuries vs. necessities.c. the definition of the market.d. the number of close substitutes.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: Y21. Suppose that an increase in the price of carrots from $1.20 to $1.40 per pound raises the amount ofcarrots that carrot farmers are willing to supply from 1.2 million pounds to 1.6 million pounds.Using the midpoint method, what would be the elasticity of supply?a. 0.50（需求变动比率/价格变动比率）b. 0.54c. 1.86d. 2.00TYPE: M KEY1: E SECTION: 2 OBJECTIVE: 3 RANDOM: Y22. If the elasticity of supply of a product is greater than 1, then supply isa. inelastic.b. elastic.c. unit elastic.d. not very sensitive to change in price.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: YChapter 5/Elasticity and Its Applications 4923. Supply tends to bea. less price elastic in the long run.b. perfectly price inelastic in the long run.c. more price elastic in the long run.d. perfectly price inelastic in the long run.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 4 RANDOM: Y24. A vertical supply curve signifies thata. an infinite quantity will be supplied at a given price.b. a change in price will have no effect on quantity supplied.c. the relationship between price and quantity supplied is inverse.d. a change in price will change quantity supplied in the opposite direction.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 4 RANDOM: Y25. Suppose a producer is able to separate customers into two groups, one having a price inelasticdemand and the other having a pri ce elastic demand. If the producer’s objective is to increase total revenue, she shoulda. charge the same price to both groups of customers.b. increase the price for both groups of customers.c. increase the price charged to customers with the price elastic demand and decrease the pricecharged to customers with the price inelastic demand.d. decrease the price charged to customers with the price elastic demand and increase the pricecharged to customers with the price inelastic demand.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y1 ANSWER: d. a measure of how much buyers and sellers respond to changes in market conditions. TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y2 ANSWER: b. the quantity demanded responds substantially to changes in the price of the good. TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y3 ANSWER: a. longer the period of time considered.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y4 ANSWER: c. percentage change in the quantity demanded divided by the percentage change inprice.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y5 ANSWER: b. demand for good A would tend to be price inelastic.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y6 ANSWER: a. 0.64.TYPE: M KEY1: G SECTION: 1 OBJECTIVE: 2 RANDOM: Y50 Chapter 5/Elasticity and Its Applications7 ANSWER: c. gives the same answer regardless of the direction of change.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y8 ANSWER: d. Elasticity and slope would both remain constant along the curve.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y9 ANSWER: d. greater than 1.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y10 ANSWER: a. elastic section of the demand curve.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y11 ANSWER: c. 0.75.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y12 ANSWER: d. any rise in price above that represented by the demand curve will result in no outputdemanded.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y13 ANSWER: b. midpoint of the demand curve.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y14 ANSWER: c. a decrease in total revenue.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y15 ANSWER: c. raise the price of the bread sticks.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y16 ANSWER: b. the demand for the good must be unit elastic.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y17 ANSWER: a. positive and therefore the good is a normal good.TYPE: M KEY1: E SECTION: 1 OBJECTIVE: 2 RANDOM: Y18 ANSWER: d. quantity demanded of one good changes as the price of another good changes. TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: YChapter 5/Elasticity and Its Applications 51 19 ANSWER: a. the quantity supplied responds to changes in the price of the good.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: Y20 ANSWER: a. time.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: Y21 ANSWER: c. 1.86TYPE: M KEY1: E SECTION: 2 OBJECTIVE: 3 RANDOM: Y22 ANSWER: b. elastic.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: Y23 ANSWER: c. more price elastic in the long run.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 4 RANDOM: Y24 ANSWER: b. a change in price will have no effect on quantity supplied.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 4 RANDOM: Y25 ANSWER: d. decrease the price charged to customers with the price elastic demand and increasethe price charged to customers with the price inelastic demand.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: YChapter 5。
【期末考试必备】安徽大学研究生公共英语教材上下册Summary
上册Summary of Unit 2(Recession-proofing your career) In the text, the author firstly tries to tell us that guaranteed jobs have already become history and it’s high time to engage in a lifelong, self-monitored process which can help to promote and prepare oneself for a change, esp. during periods of recession. She then suggests some skills. She recommends discovering both your overt and covert talents, making sure that a wide range of positions are available to you, and never committing to any “hot job” which exceeds either your interest or talent. Moreover, being skilled or qualified is not the only criteria. You must be able to “market” yourself, to convince the employer that you are the most suitable candidate for the job, for which purpose you have to establish a social network that can help you make your career decisions “both inside and outside of your professions.” Psychological elements are also important, so never let you down and find a balance between the ambitious Type A and more relaxed Type B. Finally, always follow work trends. In a word, don't be under the misconception that your job is always secure and if you work hard you’ll surely get a good job. You must be fully responsible for the future prospects of your chosen career.I am bound to face the work dilemma in the future sooner or later. I quite agree with the author’s opinion. There is no reason for us to stop learning when we are working. The author’s suggestions will help me much in the foreseeable future.Summary of Unit 3(Lies)People usually have very negative views regarding lies. Liars are frequently criticized, even cursed. Yet this passage exemplifies a different perspective, one which cruelly reveals the fact that everyone tells lies and that lies are indispensable for happiness, perhaps even our very survival. According to the author, lies are consoling elements that can soothe dying patients and help consolidate the requirements of a society. Lies make us feel superior to other species and disguise our mortal doom. Religions abound with myths and tales, which are basically lies that provide human beings with a sense of safety. People need big lies, though they are occasionally taken advantage of, because lying disguises our mortality, our inadequacies, our fears and anxieties, our loneliness in the midst of the crowd.I was impressed by the sentence—“Art is a lie that tells the truth. If someone is not willing to admit he/she have told lies, the facts itself is a lie. People must have told lies for different reasons and in different environments in our past ages. We know the choice between lies and truth decided mainly bases on our purposes. And we prefer to believe lies, because truth may be frightening. But I just agree the author’s views in a certain degree. Because lies can make the betterment of the world, but can never make the world.下册Summary of Unit 1(When Goodness Isn’t Good Enough)Summary of Unit 2(The Pleasures of Ignorance)In a general sense, ignorance is a derogatory word. In dictionary, the mean of “ignorance”is “lack of knowledge or information”. Ignorance is a condition or state where a person ignores, disregards, or overlooks knowledge about something. It is when the person is uninformed, is uneducated about something.At the beginning of the article, the author felt sad of his current store of knowledge after many years’ expensive education. He thought a person would feel comfortable when a he was ignorant. At the end of the article, it suddenly occurred to the author when he has gone his way calm and happy, he may be the only one who is ignorant, for anyone will not admit that he is a ignorant person.No matter how hard we learn, we can’t learn to the end of knowledge. So there is no limit to knowledge, we are all ignorant in this sense. Ignorance is a two-sided coin. From the good side, if we admit our ignorance, we can learn more and improve ourselves in our jobs, ability, and other fields. If we are ignorant and we don’t admit it, we will fall behind the person who admits his ignorance. So in my point of view, whether our ignorance is good or bad, our attitude is a crucial factor.Summary of Unit 4(Rags to Rags, Riches to Riches) In this article, the author said“Opportunity is the crux of the American ideal.” People in the American society used to think that they are sure to succeed and make their dreams come true with diligence. But in recent years, “American dream” is seriously challenged. With regard to the economic development, the author holds that America is already a middle-aged country now, and pessimistic spirit has come to dominate the national consciousness. And the economic mobility in America is getting lower and lower compared to other western country. The idea of the “American Dream” is starting to fade since rich children keep rich when poor children stay poor. And at the end of the article, the author think we need to get out of poverty for the sake of restoring the spirit, and one effective way is to improve education, which will have a great effect on economic mobility across generations.Because of my limited knowledge of American economics, I can’t make some powerful viewpoints to the economic mobility in USA. But I think opportunity is an important part in American ideal. In America, opportunities are more, and relatively fairer than other areas. On the basis of this, dreams in USA come true more easily than other areas. And education is a significant factor to change the state of “rags to rags”, if children in poor family get opportunity to be educated, they will master advanced skills to get a good job and have a better life. And will it have a great effect on economic mobility, as said in the article? I’m not sure.Summary of Unit 5(Teaching Our Children about Evil)In every language, there is a pair of words expressing good and evil, but what really is good and evil? Moral relativists think that the standards of good and evil are only products of local culture, custom, or prejudice. Someone think evil cannot exist without good, nor good without evil.We are always taught to do good, not evil, and there are relatively few ways to do good, but there are countless ways to do evil, which is named “Destructive Potentials” and can destroy our and others’ life. The author said there are usually three ways to treat destructive potentials: denial, projection，displacement. To prevent evil, the author of this article argues, we must first know what is truly “evil”, and then find social forces that may activate destructive potentials. On the basis of knowing what’s “evil”, the author offer some hows to teach our children at the end.。
曼昆经济 5
Chapter 5Elasticity and Its ApplicationsMULTIPLE CHOICE1.In general, elasticity isa. the friction that develops between buyers and sellers in a market.b. a measure of how much government intervention is prevalent in a market.c. a measure of how competitive a market is.d. a measure of how much buyers and sellers respond to changes in market conditions.ANSWER: d. a measure of how much buyers and sellers respond to changes in market conditions. TYPE: M SECTION: 1 DIFFICULTY: 12. When studying how some event or policy affects a market, elasticity provides information on thea. direction of the effect on the market.b. magnitude of the effect on the market.c. efficiency of the effect on the market.d. equity of the effect on the market.ANSWER: b. magnitude of the effect on the market.TYPE: M SECTION: 1 DIFFICULTY: 23. The most basic tools of economics area. demand and supply.b. price and quantity.c. monetary and fiscal policy.d. elasticity of demand and supply.ANSWER: a. demand and supply.TYPE: M SECTION: 1 DIFFICULTY: 14. The price elasticity of demand measures how responsivea. buyers are to a change in income.b. sellers are to a change in price.c. buyers are to a change in price.d. sellers are to a change in buyers’ income s.ANSWER: c. buyers are to a change in price.TYPE: M SECTION: 1 DIFFICULTY: 15. The price elasticity of demand measuresa. a buyer’s responsiveness to a change in the price of a good.b. the increase in demand as additional buyers enter the market.c. how much more of a good consumers will demand when incomes rise.d. the increase in demand that will occur from a change in one of the nonprice determinants of demand. ANSWER: a. a buyer’s responsiveness to a change in the price of a good.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y6. The concept of elasticity is used toa. analyze how much the economy is capable of expanding.b. determine the level of government invention in the economy.c. analyze supply and demand with greater precision.d. calculate consumer credit purchases.ANSWER: c. analyze supply and demand with greater precision.TYPE: M SECTION: 1 DIFFICULTY: 27. Demand is said to be elastic ifa. the price of the good responds substantially to changes in demand.b. demand shifts substantially when the price of the good changes.c. buyers do not respond much to changes in the price of the good.d. the quantity demanded responds substantially to changes in the price of the good. ANSWER: d. the quantity demanded responds substantially to changes in the price of the good. TYPE: M SECTION: 1 DIFFICULTY: 18. Demand is said to be inelastic ifa. the quantity demanded changes only slightly when the price of the good changes.b. demand shifts only slightly when the price of the good changes.c. buyers respond substantially to changes in the price of the good.d. the price of the good responds only slightly to changes in demand.ANSWER: a. the quantity demanded changes only slightly when the price of the good changes. TYPE: M SECTION: 1 DIFFICULTY: 29. An inelastic demand means thata. consumers hardly respond to a change in price.b. consumers respond substantially to a change in price.c. consumers respond directly to a change in income.d. the change in quantity demanded is equal to the change in price.ANSWER: a. consumers hardly respond to a change in price.TYPE: M SECTION: 1 DIFFICULTY: 110. When quantity demanded responds only slightly to changes in price, demand is said to bea. unit elastic.b. elastic.c. inelastic.d. perfectly inelastic.ANSWER: c. inelastic.TYPE: M SECTION: 1 DIFFICULTY: 111. If a good is a necessity, demand for the good would tend to bea. elastic.b. horizontal.c. unit elastic.d. inelastic.ANSWER: d. inelastic.TYPE: M SECTION: 1 DIFFICULTY: 212. When quantity demanded responds substantially to changes in price, demand is said to bea. elastic.b. inelastic.c. unit elastic.d. perfectly elastic.ANSWER: a. elastic.TYPE: M SECTION: 1 DIFFICULTY: 113. If a good is a luxury, demand for the good would tend to bea. inelastic.b. elastic.c. unit elastic.d. horizontal.ANSWER: b. elastic.TYPE: M SECTION: 1 DIFFICULTY: 214. The elasticity of demand for luxuries tends to bea. greater than 1.b. less than 1.c. equal to 1.d. equal to 0.ANSWER: a. greater than 1.TYPE: M SECTION: 1 DIFFICULTY: 215. If a person only occasionally enjoys a cup of coffee, his demand for coffee would bea. horizontal.b. inelastic.c. unit elastic.d. elastic.ANSWER: d. elastic.TYPE: M SECTION: 1 DIFFICULTY: 216. A person who has high cholesterol and must exercise an hour every day has what type of demand for exerciseequipment ?a. elasticb. unit elasticc. inelasticd. weakANSWER: c. inelasticTYPE: M SECTION: 1 DIFFICULTY: 217. Demand for a good would tend to be more inelastic thea. fewer the available substitutes.b. longer the time period considered.c. more the good is considered a luxury good.d. more narrowly defined the market is.ANSWER: a. fewer the available substitutes.TYPE: M SECTION: 1 DIFFICULTY: 218. Chocolate Chip Cookie Dough ice cream would tend to have very elastic demand becausea. it must be eaten quickly.b. the market is broadly defined.c. there are few substitutes.d. other flavors of ice cream are almost perfect substitutes.ANSWER: d. other flavors of ice cream are almost perfect substitutes.TYPE: M SECTION: 1 DIFFICULTY: 219. Werthers candy tends to have an elastic demand becausea. the candy market is too broadly defined.b. there are many close substitutes for Werthers.c. Werthers are considered by some to be a necessity.d. it is usually eaten quickly and therefore the time horizon is short.ANSWER: b. there are many close substitutes for Werthers.TYPE: M SECTION: 1 DIFFICULTY: 220. There are very few, if any, good substitutes for motor oil. Therefore,a. the supply of motor oil would tend to be price elastic.b. the demand for motor oil would tend to be price elastic.c. the demand for motor oil would tend to be price inelastic.d. the demand for motor oil would tend to be income elastic.ANSWER: c. the demand for motor oil would tend to be price inelastic.TYPE: M SECTION: 1 DIFFICULTY: 221. Holding all other forces constant, when the price of gasoline rises, the number of gallons of gasoline demandedwould fall substantially over a ten-year period becausea. buyers tend to be much less sensitive to a change in price when given more time to react.b. buyers will have substantially more income over a ten-year period.c. buyers tend to be much more sensitive to a change in price when given more time to react.d. None of these answers are correct.ANSWER: c. buyers tend to be much more sensitive to a change in price when given more time to react.TYPE: M SECTION: 1 DIFFICULTY: 222. A good will have a more inelastic demanda. the greater the availability of close substitutes.b. the narrower the definition of the market.c. the longer the period of time.d. if it is considered a necessity.ANSWER: d. if it is considered a necessity.TYPE: M SECTION: 1 DIFFICULTY: 223. When the price of bubble gum is $0.50, the quantity demanded is 400 packs per day. When the price falls to $0.40,the quantity demanded increases to 600. Given this information and using the midpoint method, you know that the demand for bubble gum isa. inelastic.b. elastic.c. unit elastic.d. perfectly inelastic.ANSWER: b. elastic.TYPE: M SECTION: 2 DIFFICULTY: 324. Economists compute the price elasticity of demand as thea. percentage change in the price divided by the percentage change in quantity demanded.b. change in quantity demanded divided by the change in the price.c. percentage change in the quantity demanded divided by the percentage change in price.d. percentage change in the quantity demanded divided by the percentage change in income.ANSWER: c. percentage change in the quantity demanded divided by the percentage change in price.TYPE: M SECTION: 1 DIFFICULTY: 225. Most economists report the elasticity of demand asa. the absolute value of the actual number.b. a negative number, since price and quantity demanded move in opposite directions.c. a percentage, since both the numerator and denominator are percentages.d. a dollar amount, since we are measuring the change in price.ANSWER: a. the absolute value of the actual number.TYPE: M SECTION: 1 DIFFICULTY: 226. The midpoint method is used to compute elasticity because ita. automatically computes a positive number instead of a negative number.b. uses the same equation that is used to compute slope.c. gives the same answer regardless of the direction of change.d. automatically rounds quantities to the nearest whole unit.ANSWER: c. gives the same answer regardless of the direction of change.TYPE: M SECTION: 1 DIFFICULTY: 227. Which of the following is NOT a determinant of the price elasticity of demand for a product?a. timeb. pricec. market definitiond. substitutesANSWER: b. priceTYPE: M SECTION: 1 DIFFICULTY: 128. The price elasticity of demand for a good measures how willinga. consumers are to move away from the good as price rises.b. firms are to produce more of a good as price rises.c. consumers are to buy more of a good as price rises.d. firms are to produce more of a good as price falls.ANSWER: a. consumers are to move away from the good as price rises.TYPE: M SECTION: 1 DIFFICULTY: 229. The greater the price elasticity of demand thea. more likely the product is a necessity.b. smaller the responsiveness of quantity demanded to price.c. greater the percentage change in price over the percentage change in quantity demanded.d. greater the responsiveness of quantity demanded to price.ANSWER: d. greater the responsiveness of quantity demanded to price.TYPE: M SECTION: 1 DIFFICULTY: 230. Suppose there is a 6 percent increase in the price of good X and a resulting 6 percent decrease in the quantity of Xdemanded. Price elasticity of demand for X isa. 1.b. 6.c. 0.d. infinite.ANSWER: a. 1.TYPE: M SECTION: 1 DIFFICULTY: 231. Suppose the price of Twinkies is reduced from $1.45 to $1.25 and, as a result, the quantity of Twinkies demandedincreases from 2,000 to 2,200. Using the midpoint method, the price elasticity of demand for Twinkies in the given price range isa. 2.00.b. 1.55.c. 1.00.d. .64.ANSWER: d. .64.TYPE: M SECTION: 1 DIFFICULTY: 332. If the price elasticity of demand for a good is 4.0, then a 10 percent increase in price would result in aa. 4.0 percent decrease in the quantity demanded.b. 10 percent decrease in the quantity demanded.c. 40 percent decrease in the quantity demanded.d. 400 percent decrease in the quantity demanded.ANSWER: c. 40 percent decrease in the quantity demanded.TYPE: M SECTION: 1 DIFFICULTY:333. If a 15 percent increase in price causes a 30 percent decrease in quantity demanded, this product mighta. have no close substitute.b. be a luxury.c. be part of a broadly defined market.d. be in a short time horizon.ANSWER: b. be a luxury.TYPE: M SECTION: 1 DIFFICULTY:334. The main reason for using the midpoint method is that ita. gives the same answer regardless of the direction of change.b. uses fewer numbers.c. rounds prices to the nearest dollar.d. rounds quantities to the nearest whole unit.ANSWER: a. gives the same answer regardless of the direction of change.TYPE: M SECTION: 1 DIFFICULTY: 235. Demand is elastic if elasticity isa. less than 1.b. equal to 1.c. equal to 0.d. greater than 1.ANSWER: d. greater than 1.TYPE: M SECTION: 1 DIFFICULTY: 136. Demand is inelastic if elasticity isa. less than 1.b. equal to 1.c. greater than 1.d. equal to 0.ANSWER: a. less than 1.TYPE: M SECTION: 1 DIFFICULTY: 137. Demand is unit elastic if elasticity isa. less than 1.b. greater than 1.c. equal to 1.d. equal to 0.ANSWER: c. equal to 1.TYPE: M SECTION: 1 DIFFICULTY: 138.According to the graph, the section of the demand curve labeled A represents thea. elastic section of the demand curve.b. inelastic section of the demand curve.c. unit elastic section of the demand curve.d. perfectly elastic section of the demand curve.ANSWER: a. elastic section of the demand curve.TYPE: M SECTION: 1 DIFFICULTY: 239. According to the graph, the point on the demand curve labeled B represents thea. elastic section of the demand curve.b. inelastic section of the demand curve.c. unit elastic section of the demand curve.d. perfectly elastic section of the demand curve.ANSWER: c. unit elastic section of the demand curve.TYPE: M SECTION: 1 DIFFICULTY:240. According to the graph, the section of the demand curve labeled C represents thea. elastic section of the demand curve.b. perfectly elastic section of the demand curve.c. unit elastic section of the demand curve.d. inelastic section of the demand curve.ANSWER: d. inelastic section of the demand curve.TYPE: M SECTION: 1 DIFFICULTY:241.According to the graph, the elasticity of demand from point Ato point B, using the midpoint method would bea. 1.b. 1.5.c. 2.d. 2.5.ANSWER: d. 2.5.TYPE: M SECTION: 1 DIFFICULTY:242. According to the graph, the elasticity of demand from point B to point C, using the midpoint method would bea. 0.5.b. 0.75.c. 1.0.d. 1.3.ANSWER: b. 0.75.TYPE: M SECTION: 1 DIFFICULTY:243. According to the graph, if the price decreased from $18 to $6, what would happen to total revenue?a. Total revenue would increase by $1200 and demand would be elastic.b. Total revenue would increase by $800 and demand would be elastic.c. Total revenue would decrease by $1200 and demand would be inelastic.d. Total revenue would decrease by $800 and demand would be inelastic.ANSWER: a. Total revenue would increase by $1200 and demand would be elastic.TYPE: M SECTION: 1 DIFFICULTY: 344. When the price of kittens was $25 each, the pet shop sold 20 per month. When they raised the price to $35 each, theysold 14 per month. The elasticity of demand for kittens would bea. 1.66.b. 1.06.c. 0.94.d. 0.60.ANSWER: b. 1.06.TYPE: M SECTION: 1 DIFFICULTY: 345. When the local used bookstore prices economics books at $15.00 each, they generally sell 70 per month. If they lowerthe price to $7.00 each they sell 90. Given this, we know that the elasticity of demand for economics books isa. 2.91, so this store should lower price to raise total revenue.b. 2.91, so this store should raise price to raise total revenue.c. 0.34, so this store should lower price to raise total revenue.d. 0.34, so this store should raise price to raise total revenue.ANSWER: d. 0.34, so this store should raise price to raise total revenue.TYPE: M SECTION: 1 DIFFICULTY: 346. Demand is said to be inelastic if thea. quantity demanded changes proportionately more than price.b. price changes proportionately more than income.c. quantity demanded changes proportionately less than price.d. quantity demanded changes proportionately the same as price.ANSWER: c. quantity demanded changes proportionately less than price.TYPE: M SECTION: 1 DIFFICULTY: 247. Demand is said to be unit elastic ifa. quantity demanded changes by the same percent as the price.b. quantity demanded changes by a larger percent than the price.c. the demand curve shifts by the same percentage amount as the price.d. quantity demanded does not respond to a change in price.ANSWER: a. quantity demanded changes by the same percent as the price.TYPE: M SECTION: 1 DIFFICULTY: 248. Elasticity of demand is closely related to the slope of the demand curve. The more responsive buyers are to a changein price, the demand curve will bea. steeper.b. further to the right.c. flatter.d. closer to the vertical axis.ANSWER: c. flatter.TYPE: M SECTION: 1 DIFFICULTY: 249. The flatter the demand curve through a given point, thea. greater the price elasticity of demand.b. smaller the price elasticity of demand.c. closer the price elasticity of demand will be to the slope of the curve.d. more equal the price elasticity of demand will be to the slope of the curve.ANSWER: a. greater the price elasticity of demand.TYPE: M SECTION: 1 DIFFICULTY: 350. A perfectly elastic demand implies thata. buyers will not respond to any change in price.b. any rise in price above that represented by the demand curve will result in no output demanded.c. price and quantity demanded respond proportionally.d. price will rise by an infinite amount when there is a change in quantity demanded.ANSWER: b. any rise in price above that represented by the demand curve will result in no output demanded. TYPE: M SECTION: 1 DIFFICULTY: 251. A perfectly elastic demand curve will bea. vertical.b. horizontal.c. downward sloping to the right.d. upward sloping to the right.ANSWER: b. horizontal.TYPE: M SECTION: 1 DIFFICULTY: 152. The smaller the price elasticity of demand thea. closer the price elasticity of demand will be to the slope of the curve.b. flatter the demand curve will be through a given point.c. steeper the demand curve will be through a given point.d. more equal the price elasticity of demand will be to the slope of the curve.ANSWER: c. steeper the demand curve will be through a given point.TYPE: M SECTION: 1 DIFFICULTY: 353. In the case of perfectly inelastic demand,a. quantity demanded stays the same regardless of price changes.b. huge changes in quantity demanded result from very small changes in the price.c. the change in quantity demanded exactly equals the change in price.d. the change in quantity demanded will be twice the change in price.ANSWER: a. quantity demanded stays the same regardless of price changes.TYPE: M SECTION: 1 DIFFICULTY: 354. A perfectly inelastic demand curve will bea. negatively sloped, because buyers decrease their purchases when the price rises.b. vertical, because buyers purchase the same amount whether the price rises or falls.c. positively sloped, because buyers respond by increasing their purchases when price rises.d. horizontal, because buyers increase their purchases by huge amounts with slight changes in price. ANSWER: b. vertical, because buyers purchase the same amount whether the price rises or falls.TYPE: M SECTION: 1 DIFFICULTY: 355. When small changes in price lead to infinite changes in quantity demanded, demand is perfectlya. elastic and will be horizontal.b. inelastic and will be horizontal.c. elastic and will be vertical.d. inelastic and will be vertical.ANSWER: a. elastic and will be horizontal.TYPE: M SECTION: 1 DIFFICULTY: 356. As elasticity of demand increases the demand curve getsa. flatter and the price elasticity of demand will be less than 1.b. steeper and the price elasticity of demand will be greater than 1.c. flatter and the price elasticity of demand will be greater than 1.d. steeper and the price elasticity of demand will be less than 1.ANSWER: c. flatter and the price elasticity of demand will be greater than 1.TYPE: M SECTION: 1 DIFFICULTY: 357. When quantity moves proportionally the same amount as price, demand isa. relatively elastic and the price elasticity of demand is 1.b. perfectly elastic and the price elasticity of demand is 1.c. perfectly inelastic and the price elasticity of demand is less than 1.d. unit elastic and the price elasticity of demand is 1.ANSWER: d. unit elastic and the price elasticity of demand is 1.TYPE: M SECTION: 1 DIFFICULTY: 358. When the price elasticity of demand is perfectly inelastic, the elasticitya. is zero and the demand curve is vertical.b. is zero and the demand curve is horizontal.c. approaches infinity and the demand curve is vertical.d. approaches infinity and the demand curve is horizontal.ANSWER: a. is zero and the demand curve is vertical.TYPE: M SECTION: 1 DIFFICULTY: 359. A perfectly inelastic demand implies that buyersa. decrease their purchases when the price rises.b. purchase the same amount when the price rises or falls.c. increase their purchases only slightly when the price falls.d. respond substantially to an increase in price.ANSWER: b. purchase the same amount when the price rises or falls.TYPE: M SECTION: 1 DIFFICULTY: 260. Alice says that she would buy one banana split a day regardless of the price. If she is telling the truth,a. Alice’s demand for banana splits is perfectly inelastic.b. Alice’s price elasticity of demand for banana splits is 1.c. Alice’s income elasticity of demand for banana split s is negative.d. None of the above answers is correct.ANSWER: a. Alice’s demand for banana splits is perfectly inelastic.TYPE: M SECTION: 1 DIFFICULTY: 261. Which of the following would have the most elastic demand?a. clothingb. blue jeansc. Levi jeansd. All three would have the same elasticity of demand since they are all related.ANSWER: c. Levi jeansTYPE: M SECTION: 1 DIFFICULTY: 262. In any market, total revenue is pricea. divided by the price elasticity of demand.b. multiplied by quantity.c. plus quantity.d. multiplied by quantity minus the costs of production.ANSWER: b. multiplied by quantity.TYPE: M SECTION: 1 DIFFICULTY: 263. How does total revenue change as one moves down a linear demand curve?a. It increases.b. It decreases.c. It first increases, then decreases.d. It is unaffected by a movement along the demand curve.ANSWER: c. It first increases, then decreases.TYPE: M SECTION: 1 DIFFICULTY: 364. On a downward-sloping linear demand curve, total revenue would be at a maximum at thea. midpoint of the demand curve.b. lower end of the demand curve.c. upper end of the demand curve.d. It is impossible to tell without knowing prices and quantities demanded.ANSWER: a. midpoint of the demand curve.TYPE: M SECTION: 1 DIFFICULTY: 265. At the midpoint of a downward-sloping linear demand curve, price elasticity would bea. inelastic.b. elastic.c. unit elastic.d. perfectly elastic.ANSWER: c. unit elastic.TYPE: M SECTION: 1 DIFFICULTY: 266. A demand curve with a zero elasticity is perfectlya. inelastic and vertical.b. inelastic and horizontal.c. elastic and vertical.d. elastic and horizontal.ANSWER: a. inelastic and vertical.TYPE: M SECTION: 1 DIFFICULTY: 367.According to the graph, if price falls in the A range of thedemand curve we can expect total revenue toa. increase.b. decrease.c. stay the same.d. decrease, then increase.ANSWER: a. increase.TYPE: M SECTION: 1 DIFFICULTY: 368. According to the graph, if price falls in the C range of the demand curve we can expect total revenue toa. increase.b. decrease.c. stay the same.d. decrease, then increase.ANSWER: b. decrease.TYPE: M SECTION: 1 DIFFICULTY: 369.According to the graph, as price falls from P A to P B, which demand curve is most elastic?a. D1b. D2c. D3d. All of the above are equally elastic.ANSWER: a. D1TYPE: M SECTION: 1 DIFFICULTY: 370. According to the graph, as price falls from P A to P B, which demandcurve is least elastic?a. D1b. D2c. D3d. All of the above are equally elastic.ANSWER: c. D3TYPE: M SECTION: 1 DIFFICULTY: 371. When demand is inelastic, a decrease in price will causea. an increase in total revenue.b. a decrease in total revenue.c. no change in total revenue.d. There is insufficient information to answer this question.ANSWER: b. a decrease in total revenue.TYPE: M SECTION: 1 DIFFICULTY: 272.According to the graph, total revenue at a price of $30 would bea. $9,000.b. $7,000.c. $5,000.d. $3,000.ANSWER: a. $9,000.TYPE: M SECTION: 1 DIFFICULTY: 273. According to the graph, when price falls from point $40 to $30 we know that demand must bea. elastic, since total revenue increases from $8000 to $9000.b. inelastic, since total revenue increases from $8000 to $9000.c. inelastic, since total revenue decreases from $9000 to $8000.d. unit elastic, since total revenue decreases from $9000 to $8000.ANSWER: a. elastic, since total revenue increases from $8000 to $9000.TYPE: M SECTION: 1 DIFFICULTY: 374. According to the graph, lowering price from $30 to $20 woulda. increase total revenue by $2,000.b. decrease total revenue by $2,000.c. increase total revenue by $1,000.d. decrease total revenue by $1,000.ANSWER: d. decrease total revenue by $1,000.TYPE: M SECTION: 1 DIFFICULTY: 375. An increase in price causes an increase in totalrevenue whena. demand is elastic.b. demand is inelastic.c. demand is unit elastic.d. All of the above are possible.ANSWER: b. demand is inelastic.TYPE: M SECTION: 1 DIFFICULTY: 276.According to the graph, if price increases from $10 to $15, totalrevenue willa. increase by $20, so demand must be inelastic.b. increase by $5, so demand must be inelastic.c. decrease by $20, so demand must be elastic.d. decrease by $10, so demand must be elastic.ANSWER: a. increase by $20, so demand must be inelastic.TYPE: M SECTION: 1 DIFFICULTY: 377. According to the graph, the price elasticity of this demandcurve between $10 and $15 isa. unit elastic.b. elastic.c. inelastic.d. perfectly elastic.ANSWER: c. inelastic.TYPE: M SECTION: 1 DIFFICULTY: 378. According to the graph, the total revenue at P1 is represented by area(s)a. B + D.b. A + B.c. C + D.d. D.ANSWER: a. B + D.TYPE: M SECTION: 1 DIFFICULTY: 279. According to the graph, total revenue at P2 would be represented by area(s)a. B + D.b. A + B.c. C + D.d. D.ANSWER: b. A + B.TYPE: M SECTION: 1 DIFFICULTY: 280. If the demand for donuts is elastic, a decrease in the price ofdonuts willa. increase total revenue of donut sellers.b. decrease total revenue of donut sellers.c. not change total revenue of donut sellers.d. There is not enough information to answer this question. ANSWER: a. increase total revenue of donut sellers.TYPE: M SECTION: 1 DIFFICULTY: 281. The local pizza restaurant makes such great bread sticks thatconsumers do not respond much to a change in the price. If theowner is only interested in increasing revenue, he shoulda. lower the price of the bread sticks.b. leave the price of the bread sticks alone.c. raise the price of the bread sticks.d. reduce costs.ANSWER: c. raise the price of the bread sticks.TYPE: M SECTION: 1 DIFFICULTY: 2。
Chapter 5 Elasticity and Its Application
1. A 22% $5 increase in price... 4
Demand
90 100
Quantity
2. ...leads to a 11% decrease in quantity.
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc.
Determinants of Price Elasticity of Demand
Necessities versus Luxuries Availability of Close Substitutes Definition of the Market Time Horizon
… allows us to analyze supply and demand with greater precision.
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc.
Price Elasticity of Demand
Computing the Price Elasticity of Demand
Price Elasticity of Demand= (Q2 Q1 )/[(Q2 Q1 )/2] (P2 P1 )/[(P2 P1 )/2]
Example: If the price of an ice cream cone increases from $2.00 to $2.20 and the amount you buy falls from 10 to 8 cones the your elasticity of demand, using the midpoint formula, would be calculated as:
经济学原理(英文版)
经济学原理（英文版）●Chapter 1 The scope and Method of Economics●Why study Economics?●To learn a way of Thinking●Opportunity Cost 机会成本●The best alternative that we forgo, or give up, when we make a choice or adecision.指决策过程中面临多项选择，当中被放弃而价值最高的选择●Cost: What You Must Give Up●Opportunity cost is the best thing that you must give up to get something -thehighest-valued alternative forgone.●Benefit: What You Gain●Benefit is the gain or pleasure that something brings.●Benefit is measured by what you are willing to give up.●Are there always opportunity cost for every choice we made?●Pre-conditions:●1.The resource is scarce;limited●2. Multiple usage for a resources;●3. The resource has been fully utilized;●4. Resources can be flowed freely●=/ actual cost, national cost●Marginalism 边际主义●The process of analyzing the additional or incremental(增加的) costs or benefitsarising from a choice or decision.●Marginal Cost 边际成本●is the opportunity cost of a one-unit increase in an activity.●you must give up to get one additional unit of it.●Marginal Benefit 边际效益●is the what you gain when you get one more unit of something.●is the what you gain when you get one more unit of up to get one additionalunit of it.●To understand Society●To be an informed citizen/voter●The scope of Economics●Microeconomics●The study of the choices that individuals and businesses make and the way thesechoices interact and are influenced by governments.●firms●households●Macroeconomics●The study of the aggregate (or total 总计) effects on the national economy andthe global economy of the choices that individuals, businesses, and governmentsmake.●income●employment●output●The method of Economics●positive economics 实证经济学●An approach to economics that seeks to understand behavior and the operation ofsystems without making judgments. It describes what exists and how it works.●normative economics 规范经济学●An approach to economics that analyzes outcomes of economicbehavior,evaluates them as good or bad, and may prescribe courses of action.Alsocalled policy economics.●should be ...●Chapter 2●The economic problem : Scarcity and choice●●The three basic question●What gets produced?●How is it produced ?●Who gets what is produced?●经济学要解决的问题●资源配置（和利用）Resource allocation●Scarcity means that wants are greater than what we can produce with ourresources.缺乏●Chapter 3●Demand, supply ,and market equilibrium●Firms and Households: The basic decision making units●Firm●An organization that transforms resources (inputs)into products(outputs).Firms are the primary producing units in a market economy.●entrepreneur●A person who organizes, manages, and assumes the risks of a firm,takinga new idea or a new product and turning it into a successful business.(produce to earn profit)●households●The consuming units in an economy.●Input markets and output markets: the circular flow●Output markets●The markets in which goods and services are exchanged.●Input markets●The markets in which the resources used to produce goods and services areexchanged.●Factors of production●The inputs into the production process. Land, labor, and capital are the threekey factors of production.●Demand in product and output market●quantity demand●The amount (number of units) of product that a household would buy in agiven period if it could buy all it wanted at the current market price.●demand curve●A graph illustrating how much of a given product a household would bewilling to buy at different prices.●●law of demand●The negative relationship between price and quantity demanded: Ceterisparibus, as price rises, quantity demanded decreases; as price falls,quantity demanded increases. 反比关系●Other determinants of Household demand●Income and Wealthincome available to the household●Prices of other goods and service●inferior goods 次品●substitutes 替代品●A price up, B demand upB 是A的替代品●complements,complementary goods 互补品●car price up, gasoline demand down●taste and preference●expectation 影响需求consumption policies●Shift of demand versus movement along a demand curve●shift of a demand curve (曲线移动) change in demand●factors shift the demand curve●buyers' incomes●the price of a substitute good●the number of buyers●movement along a demand curve （点移动）change in quantity demanded●Market demand●summing the quantities every consumer is willing to buy at each differentprice.●Supply in product and output market●Profit●The difference between revenues and costs.实现利润最大化是企业生产的目的●quantity supplied●The amount of a particular productthat a firm would be willingand able to offerfor sale at aparticular price during a giventime period.●law of supply●The positive relationship between price and quantity of a good supplied:Anincrease in market price will lead to an increase in quantity supplied, and adecrease in market price will lead to a decrease in quantity supplied. 正比关系●●Market equilibrium●Qd =Qs●there is no tendency for price to change●Excess demand●●●Excess supply●●Chapter 4●Demand and Supply applications 需求和供应的应用●Price rationing 价格配给● is the process by which the market system allocates goods and services toconsumers when quantity demanded exceeds quantity supplied.●●Constraints on the Market and Alternative rationing mechanism 非价格配给制●Price ceiling (最高限价)●A maximum price that sellers may charge for a good, usually set bygovernment.●non-price rationing●Queuing (排队）●Waiting in line as a means of distributing goods and services: a nonpricerationing mechanism.●Ration coupons (优惠券)●Tickets or coupons that entitle individuals to purchase a certain amount ofa given product per month.●Favored customers●Those who receive special treatment from dealers during situations ofexcess demand.●Black market (黑市)●A market in which illegal trading takes place at market-determined prices.●price floor 价格下限●A minimum price below which exchange is not permitted.●Supply and Demand and Market efficiency●Consumer surplus 消费者盈余●The difference between the maximum amount a person is willing to pay for agood and its current market price.●愿意支付与实际支付的差额。
曼昆经济学原理试题Chapter 05b
Chapter 5Elasticity and Its ApplicationsTest B1. The elasticity of demand measuresa. the increase in demand as additional buyers enter the market.b. a buyer’s responsiveness to a change in the price of a good.c. how much less of a good consumers will demand when incomes fall.d. the increase in supply that will occur from an increase in the price of a good.ANSWER: b. a buyer’s responsiveness to a change in the price of a good. TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y2. Demand is said to be inelastic ifa. consumers hardly respond to a change in price.b. consumers respond substantially to a change in price.c. consumers respond directly to a change in income.d. the change in quantity demanded is equal to the change in price.ANSWER: a. consumers hardly respond to a change in price.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y3. The elasticity of demand for luxuries tends to bea. greater than 1.b. equal to 1.c. less than 1.d. equal to 0.ANSWER: c. less than 1.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y4. Milky Way candy bars tend to have an elastic demand becausea. the candy bar market is too broadly defined.b. there are many close substitutes for Milky Ways.c. Milky Ways are considered by some to be a necessity.d. it is usually eaten quickly and therefore the time horizon is short.ANSWER: b. there are many close substitutes for Milky Ways.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y5. Economists compute elasticity using the midpoint method primarily because ita. is the simplest method to compute elasticity.b. uses the same equation that is used to compute slope.c. automatically rounds quantities to the nearest whole unit.d. gives the same answer regardless of the direction of change.ANSWER: d. gives the same answer regardless of the direction of change. TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y52 Chapter 5/Elasticity and Its Applications6. Demand is elastic if elasticity isa. equal to 1.b. equal to 0.c. less than 1.d. greater than 1.ANSWER: d. greater than 1.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: YNOTE: THE FOLLOWING QUESTION IS REPEATED FROM THE ON-LINE QUIZZES. YOUR STUDENTS MAY HAVE ALREADY SEEN THIS QUESTION AND ITS ANSWER.7. A demand curve that is a downward-sloping straight line will havea. a positive slope.b. higher elasticity at the top than at the bottom.c. lower elasticity at the top than at the bottom.d. constant elasticity throughout its length.ANSWER: b. higher elasticity at the top than at the bottom.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y8. When the price of Pokemon cards are $.50, the quantity demanded is 400 cards per day. Whenthe price falls to $.40, the quantity demanded increases to 600. Given this information and using the midpoint method, you know that the demand for Pokemon cards isa. elastic.b. inelastic.c. unit elastic.d. perfectly inelastic.ANSWER: a. elastic.TYPE: M KEY1: E SECTION: 2 OBJECTIVE: 3 RANDOM: Y9. A perfectly inelastic demand isa. vertical because buyers purchase the same amount whether the price rises or falls.b. negatively sloped because buyers decrease their purchases when the price rises.c. positively sloped because buyers respond by increasing their purchases when pricerises.d. horizontal because buyers increase their purchases by huge amounts with slightchanges in price.ANSWER: a. vertical because buyers purchase the same amount whether the pricerises or falls.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y10. Total revenue changes as one moves down a linear demand curve bya. decreasing.b. increasing.c. decreasing, then increasing.d. increasing, then decreasing.ANSWER: d. increasing, then decreasing.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: YChapter 5/Elasticity and Its Applications 5311. If the demand for bagels is elastic, an increase in the price of bagels willa. increase total revenue of bagel sellers.b. decrease total revenue of bagel sellers.c. not change total revenue of bagel sellers.d. There is not enough information to answer this question.ANSWER: b. decrease total revenue of bagel sellers.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: YNOTE: THE FOLLOWING QUESTION IS REPEATED FROM THE ON-LINE QUIZZES. YOUR STUDENTS MAY HAVE ALREADY SEEN THIS QUESTION AND ITS ANSWER.12. Corporation XYZ has a linear demand curve for its product. The company is currentlyproducing on the lower portion of its demand curve. Increasing the price of the product willa. not affect the com pany’s total revenue.b. increase the company’s total revenue.c. decrease the company’s total revenue.d. increase the company’s total cost of production.ANSWER: b. increase the company’s total revenue.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y13. When a change in the price of a good results in no change in total revenue you know that thedemand for this product isa. elastic.b. perfectly inelastic.c. inelastic.d. unit elastic.ANSWER: d. unit elastic.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y14. If a 6 percent increase in income results in a 3 percent decrease in the quantity demanded ofmacaroni, then the income elasticity of demand for macaroni isa. negative and therefore macaroni is an inferior good.b. negative and therefore macaroni is a normal good.c. positive and therefore macaroni is an inferior good.d. positive and therefore macaroni is a normal good.ANSWER: a. negative and therefore macaroni is an inferior good.TYPE: M KEY1: E SECTION: 1 OBJECTIVE: 2 RANDOM: Y15. The cross-price elasticity of demand determines whether goods area. normal or inferior.b. elastic or inelastic.c. luxuries or necessities.d. complements or substitutes.ANSWER: d. complements or substitutes.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y54 Chapter 5/Elasticity and Its Applications16. The price elasticity of supply measures how responsivea. sellers are to a change in price.b. buyers are to a change in price.c. buyers are to a change in income.d. sellers are to a change in buyers’ income.ANSWER: a. sellers are to a change in price.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: Y17. On the graph shown, the elasticity of supply from point B to point C, using the midpointmethod would be approximatelya. 0.5b. 0.62c. 0.86d. 1.1ANSWER: c. 0.86TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y18. The price elasticity of supply for a good will be greater (more elastic) thea. more necessary the good is considered.b. broader the market is defined.c. more close substitutes the good has.d. longer the time period being considered.ANSWER: d. longer the time period being considered.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: YChapter 5/Elasticity and Its Applications 55 19. If two supply curves pass through the same point and one is steep and the other is flat, which of the following would be correct?a. The flatter supply curve is more elastic.b. The steeper supply curve is more elastic.c. The elasticity of supply will be the same for both curves.d. It is impossible to tell the elasticity of supply for either curve unless you are givenactual numbers to compute the elasticity of both curves.ANSWER: a. The flatter supply curve is more elastic.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: Y20. A vertical supply curve tells us thata. suppliers will not respond to a change in price.b. an infinite quantity will be supplied at a given price.c. suppliers will refuse to sell the product at the current market price.d. if the price of the product increases quantity supplied will decrease substantially.ANSWER: a. suppliers will not respond to a change in price.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 4 RANDOM: Y21. If the elasticity of supply of a product is 0.5, then we know that supply isa. elastic.b. inelastic.c. unit elastic.d. perfectly inelastic.ANSWER: b. inelastic.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: Y22. Knowing that the demand for wheat is inelastic, if wheat farmers wanted to increase their total revenue they should alla. plant more wheat so that they would be able to sell more each year.b. increase spending on fertilizer in an attempt to produce more on the acres they farm.c. voluntarily plow under a certain percent of their wheat crop to raise the price.d. advertise in an attempt to get consumers to buy more wheat.ANSWER: c. voluntarily plow under a certain percent of their wheat crop to raise theprice.TYPE: M KEY1: D SECTION: 3 OBJECTIVE: 5 RANDOM: Y23. A firm would be willing to supply 500 frisbees per day at a price of $3.00 each. At a price of $5.00 each the firm would be willing to supply 1100 frisbees. Using the midpoint method, the elasticity of supply would bea. 0.67.b. 0.75.c. 1.0.d. 1.5.ANSWER: d. 1.5.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 4 RANDOM: Y56 Chapter 5/Elasticity and Its Applications24. You have just been hired as a business consultant to determine what pricing policy would beappropriate in order to increase the total revenue of a clothing store. The first step you would take is toa. increase the prices of the store’s products.b. look for ways to cut costs and increase profit for the store.c. determine the elasticity of demand for the store’s produc ts.d. suggest that the store purchase an entirely new line of clothing that they could sellmore cheaply.ANSWER: c. determine the elasticity of demand for the store’s products.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 4 RANDOM: YNOTE: THE FOLLOWING QUESTION IS REPEATED FROM THE ON-LINE QUIZZES. YOUR STUDENTS MAY HAVE ALREADY SEEN THIS QUESTION AND ITS ANSWER.25. “A number of mass transit systems have been experiencing declining revenues despite fareincreases.” Assuming that the demand for mass transit has not changed (i.e., that the demand curve has not shifted), the above statement implies thata. the demand for mass transit is elastic with respect to price.b. the demand for mass transit is inelastic with respect to price.c. mass transit is an inferior good.d. revenues would have risen only if fares had been increased by a larger amount.ANSWER: a. the demand for mass transit is elastic with respect to price.TYPE: M KEY1: D SECTION: 3 OBJECTIVE: 5 RANDOM: Y1 ANSWER: b. a buyer’s responsiveness to a c hange in the price of a good.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y2 ANSWER: a. consumers hardly respond to a change in price.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y3 ANSWER: c. less than 1.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y4 ANSWER: b. there are many close substitutes for Milky Ways.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y5 ANSWER: d. gives the same answer regardless of the direction of change.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y6 ANSWER: d. greater than 1.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: YChapter 5/Elasticity and Its Applications 577 ANSWER: b. higher elasticity at the top than at the bottom.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y8 ANSWER: a. elastic.TYPE: M KEY1: E SECTION: 2 OBJECTIVE: 3 RANDOM: Y9 ANSWER: a. vertical because buyers purchase the same amount whether theprice rises or falls.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y10 ANSWER: d. increasing, then decreasing.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y11 ANSWER: b. decrease total revenue of bagel sellers.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y12 ANSWER: b. increase the company’s total revenue.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y13 ANSWER: d. unit elastic.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y14 ANSWER: a. negative and therefore macaroni is an inferior good.TYPE: M KEY1: E SECTION: 1 OBJECTIVE: 2 RANDOM: Y15 ANSWER: d. complements or substitutes.TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y16 ANSWER: a. sellers are to a change in price.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: Y17 ANSWER: c. 0.86TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y18 ANSWER: d. longer the time period being considered.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: Y58 Chapter 5/Elasticity and Its Applications19 ANSWER: a. The flatter supply curve is more elastic.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: Y20 ANSWER: a. suppliers will not respond to a change in price.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 4 RANDOM: Y21 ANSWER: b. inelastic.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 3 RANDOM: Y22 ANSWER: c. voluntarily plow under a certain percent of their wheat crop toraise the price.TYPE: M KEY1: D SECTION: 3 OBJECTIVE: 5 RANDOM: Y23 ANSWER: d. 1.5.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 4 RANDOM: Y24 ANSWER: c. determine the elasticity of demand for the store’s products.TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 4 RANDOM: Y25 ANSWER: a. the demand for mass transit is elastic with respect to price.TYPE: M KEY1: D SECTION: 3 OBJECTIVE: 5 RANDOM: Y。
Chapter5ElasticityanditsItsApplication
Chapter5ElasticityanditsItsApplicationChapter 5 Elasticity and its Its ApplicationTRUE OR FALSE1. The demand for bread is likely to be more elastic than the demand for solid-gold bread plates.(F)2. In general, demand curves for luxuries tend to be price elastic. (T)3. Goods with close substitutes tend to have more elastic demands than do goods without close substitutes. (T)4. The demand for gasoline will respond more to a change in price over a period of five weeks than over a period of five years.(F)5. The price elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in price. (T)6. Demand is inelastic if the price elasticity of demand is greater than 1. (F)7. Price elasticity of demand along a linear, downward-sloping demand curve increases as price falls. (F)8. If the price elasticity of demand is equal to 1, then demand is unit elastic. (T)9. When demand is inelastic, a decrease in price increases total revenue. (F)10. The income elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in income. (T)11. Normal goods have negative income elasticities of demand, while inferior goods have positive income elasticities ofdemand. (F)12. If the cross-price elasticity of demand for two goods is negative, then the two goods are substitutes. (T)13. If the cross-price elasticity of demand for two goods is negative, then the two goods are complements. (T)14. Price elasticity of supply measures how much the quantity supplied responds to changes in the price. (T)15. Supply and demand both tend to be more elastic in the long run and more inelastic in the short run. (T)16. If the price elasticity of supply is 2 and the quantity supplied decreases by 6%, then the price must have decreased by 3%. (T)17. If a supply curve is horizontal, then supply is said to be perfectly elastic, and the price elasticity of supply approaches infinity. (T)18. A government program that reduces land under cultivation hurts farmers but helps consumers.(F)19. OPEC failed to maintain a high price of oil in the long run, partly because both the supply of oil and the demand for oil are more elastic in the long run than in the short run. (T)20. Drug interdiction, which reduces the supply of drugs, may decrease drug-related crime because the demand for drugs is inelastic. (F)Short Answer1. Using the midpoint method, compute the elasticity of demand between points A and B. Is demand along this portion 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 portionof the curve elastic or inelastic?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 by 2.5 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.CHOICE1. In general, elasticity is a measure of (d)a. 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.2. When studying how some event or policy affects a market, elasticity provides information on the (b)a. 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.3. Which of the following statements about the price elasticity of demand is correct? (d)a. The price elasticity of demand for a good measures the willingness of buyers of the goodto buy less of the good as its price increases.b. Price elasticity of demand reflects the many economic, psychological, and social forcesthat shape consumer tastes.c. Other things equal, if good x has close substitutes and good y does not have closesubstitutes, then the demand for good x will be more elastic than the demand for good y .d. All of the above are correct.4. For a good that is a necessity, (b)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.5. Goods with many close substitutes tend to have (a)a. more elastic demands.100200300400500600700800900246810121416182022b. less elastic demands.c. price elasticities of demand that are unit elastic.d. income elasticities of demand that are negative.6. For a good that is a luxury, demand (b)a. 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.7. The demand for Neapolitan ice cream is likely quite elastic because (d)a. 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.8. Which of the following is not a determinant of the price elasticity of demand for a good? (b)a. the time horizonb. the steepness or flatness of the supply curve for the goodc. the definition of the market for the goodd. the availability of substitutes for the good13. When we move upward and to the left along a linear, downward-sloping demand curve, price elasticity of demand (b)a. first becomes smaller, then larger.b. always becomes larger.c. always becomes smaller.d. first becomes larger, then smaller.14. The difference between slope and elasticity is that (a)a. slope is a ratio of two changes, and elasticity is a ratio of two percentage changes.b. slope is a ratio of two percentage changes, and elasticity is a ratio of two changes.c. slope measures changes in quantity demanded more accurately than elasticity.d. none of the above; there is no difference between slope and elasticity.Figure 5-115. Refer to Figure 5-1. The demand curve representing the demand for a luxury good with several close substitutes is (c)a. A.b. B. AA BBCCDDQuantity Pricec. C.d. D.16. Refer to Figure 5-1.Atog says he would buy one cup of coffee per day regardless of the price. If this is true, then Atog's demand for coffee is represented by demand curve (a)a. A.b. B.c. C.d. D.17. Suppose demand is perfectly inelastic, and the supply of the good in question decreases. As a result, (b)a. the equilibrium quantity decreases, and the equilibrium price is unchanged.b. the equilibrium price increases, and the equilibrium quantity is unchanged.c. the equilibrium quantity and the equilibrium price both are unchanged.d. buyers’ total expenditure on the good is unchanged.18. The case of perfectly elastic demand is illustrated by a demand curve that is (b)a. vertical.b. horizontal.c. downward-sloping but relatively steep.d. downward-sloping but relatively flat.19. For a vertical demand curve, (a)a. slope is undefined, and price elasticity of demand is equal to 0.b. slope is equal to 0, and price elasticity of demand is undefined.c. slope and price elasticity of demand both are undefined.d. slope and price elasticity of demand both are equal to 0.20. Consider airfares on flights between New Y ork and Minneapolis. When the airfare is $250, the quantity demanded of tickets is 2,000 per week. When the airfare is $280, the quantity demanded of tickets is 1,700 per week. Using the midpoint method, (A)a. the price elasticity of demand is about 1.43, and an increase in the airfare will causeairlines' total revenue to decrease.b. the price elasticity of demand is about 1.43, and an increase in the airfare will causeairlines' total revenue to increase.c. the price elasticity of demand is about 0.70, and an increase in the airfare will causeairlines' total revenue to decrease.d. the price elasticity of demand is about 0.70, and an increase in the airfare will causeairlines' total revenue to increase.21. Harry's Barber Shop increased its total monthly revenue from $1,500 to $1,800 when it raised the price of a haircut from $5 to $9. The price elasticity of demand for Harry's Haircuts is (b)a. 0.567.b. 0.700.c. 1.429.d. 2.200.22. 156. When demand is inelastic, a decrease in price will cause (b)a. an increase in total revenue.b. a decrease in total revenue.c. no change in total revenue, but an increase in quantity demanded.d. no change in total revenue, but a decrease in quantity demanded.23. Which of the following could be the price elasticity of demand for a good for which an increase in price would increase revenue? (a)a. 0.2b. 1c. 1.5d. All of the above could be correct.24. Necessities such as food and clothing tend to have (d)a. high price elastic ities of demand and high income elasticities of demand.b. high price elastic ities of demand and low income elasticities of demand.c. low price elasticities of demand and high income elasticities of demand.d. low price elasticities of demand and low income elasticities of demand.25. For Susie, a 7 percent increase in income results in a 12 percent increase in the quantity demanded of pizza. For Susie, the income elasticity of demand for pizza is (d)a. negative, and pizza is an normal good.b. negative, and pizza is a inferior good.c. positive, and pizza is an inferior good.d. positive, and pizza is a normal good.26. Suppose good X has a negative income elasticity of demand. This implies that good X is (c)a. a normal good.b. a necessity.c. an inferior good.d. a luxury.27. Food and clothing tend to have (a)a. small income elasticities because consumers, regardless of their incomes, choose to buyrelatively constant quantities of these goods.b. small income elasticities because consumers buy proportionately more of both goods athigher income levels than they buy at low income levels.c. large income elasticities because they are necessities.d. large income elasticities because they are relatively inexpensive.28. Suppose goods A and B are substitutes for each other. We would expect the cross-price elasticity between these two goods to be (a)a. positive.b. negative.c. either positive or negative. It depends whether A and B are normal goods or inferiorgoods.d. either positive or negative. It depends whether the current price level is on the elasticor inelastic portion of the demand curve.29. Which of the following could be the cross-price elasticityof demand for two goods that are complements? (a)a. -1.3b. 0c. 0.2d. 1.430. Determinants of the price elasticity of supply is the (d)a. number of close substitutes for the good in question.b. the ability of sellers to change the amount of the good they produce.c. length of the time period.d. Both b and c31. In the long run, the quantity supplied of most goods (d)a. will increase in almost all cases, regardless of what happens to price.b. cannot respond at all to a change in price.c. can respond to a change in price, but the change is almost always inconsequential.d. can respond substantially to a change in price.32. When a supply curve is relatively flat, (c)a. sellers are not at all responsive to a change in price.b. the equilibrium price changes substantially when the demand for the good changes.c. the supply is relatively elastic.d. the supply is relatively inelastic.33. A linear, upward-sloping supply curve has (a)a. a constant slope and a changing elasticity of supply.b. a changing slope and a constant elasticity of supply.c. both a constant slope and a constant elasticity of supply.d. both a changing slope and a changing elasticity of supply.34. If the price elasticity of supply is 1.5, and a price increase led to a 1.8% increase in quantity supplied, then the price increase amounted to (c)a. 0.67%.b. 0.83%.c. 1.20%.d. 2.70%.35. On a certain supply curve, one point is (quantity supplied = 200, price = $4.00) and another point is (quantity supplied = 250, price = $4.50). Using the midpoint method, the price elasticity of supply is about (d)a. 0.22.b. 0.53.c. 1.00.d. 1.89.36. Holding all other factors constant and using the midpoint method, if a pencil manufacturer increases production from 40 to 50 boxes when price increases by 20 percent, then supply is (d)a. inelastic, since the price elasticity of supply is equal to .91.b. inelastic, since the price elasticity of supply is equal to 1.1.c. elastic, since the price elasticity of supply is equal to 0.91.d. elastic, since the price elasticity of supply is equal to 1.1.37. If the price elasticity of supply for a good is equal to infinity, then (b)a. the supply curve is vertical.b. the supply curve is horizontal.c. the supply curve also has a slope equal to infinity.d. the quantity supplied is constant regardless of the price.38. Because the demand for wheat tends to be inelastic, the development of a new, more productive hybrid wheat would tend to (b)a. increase the total revenue of wheat farmers.b. decrease the total revenue of wheat farmers.c. decrease the demand for wheat.d. decrease the supply of wheat.39. Knowing that the demand for wheat is inelastic, if all farmers voluntarily did not plant wheat on 10 percent of their land, then (c)a. consumers of wheat would buy more wheat.b. wheat farmers would suffer a reduction in their total revenue.c. wheat farmers would experience an increase in their total revenue.d. the demand for wheat would decrease.40. n the market for oil in the short run, demand (b)a. and supply are both elastic.b. and supply are both inelastic.c. is elastic and supply is inelastic.d. is inelastic and supply is elastic.41. Which of the following statements helps to explain why government drug interdiction increases drug-related crime? (c)a. The direct impact is on buyers, not sellers.b. Successful drug interdiction polic ies reduce the demand for illegal drugs.c. Drug addicts will have an even greater need for quick cash to support their habits.d. In the short run, both equilibrium quantities and prices will fall in the markets for illegaldrugs.。
Chapter5Summarizing详解
II. Writing
1) A summary should usually be about 1/3 or 1/4 as long as the original passage;
2) Write it all in your own words; 3) Follow the logical order of the original
passage; 4) The summary should be self-contained完
备的, i.e., it must convey the message of the original fully & clearly;
II. Writing
Summary writing is an exercise in compression 压缩. While writing, you may:
words & phrases or by remodeling sentences;
3) Correct all mistakes in punctuation, spelling,
grammar & idiom.
Assignment <P120>
• Write a summary of no more than 100 words.
Examples of Compression
➢His courage in battle might without exaggeration夸张 be called lion-like.
➢ He was very brave in battle. ➢The account描述 the witness gave of the
《英语写作基础》PPT--chapter5 Summary
brief and to the point, and in our own words.
Steps of paraphrasing
★Read the original carefully and comprehend its meaning wholly and correctly.
3. Make an outline that includes the main idea and the supporting details. Arrange your information in a logical order, for example, most to least important or chronological. Your order need not be the same as that in the original, but keep related supporting points together. The way you organize the outline may serve as a model for how you divide and write the essaysummary writing 5. Practice
I. What is a summary?
A summary is a shortened passage, which retains the essential information of the original. It is a fairly brief restatement --- in your own words ---of the contents of a passage.
Chapter 5 Summarizing
Chapter 5
Summarizing
(3) Further read the passage to ensure that we understand its details as well as its main idea. Read it word by word, phrase by phrase, and sentence by sentence, look up in the dictionary any word whose meaning is not clear.
Chapter 5
Summarizing
3) The summary must include major details (also known as supporting ideas) in your own words.
Chapter 5
Summarizing
4) Coherent and coherence(衔接连贯) Summary writing is different from outline writing, in which only main points are listed. Summary should be in coherence by using the proper transitional words.
Chapter 5 Summarizing
Chapter 5
Summarizing
1. What is a summary? A summary is a brief restatement of the essential thought of a longer composition. It reproduces(重现)the theme of the original with as few words of yours as possible.
研究生英语第五单元课文Summary
Summary----Unit 5In the new studies,researchers see creativity in the use of new or unusual elements int a way that is meaningful to others ,rather than completely idiosyncratic.The studies seek to take the study of creativity out of the laboratory and to focus not just on brilliant achievements in the arts and sciences but also on creative acts in all realms of life.One goal of the new research is better understand just what allow a person's inventiveness in certain areas to blossom at some points in life,and to identify factors that stifle or encourage inventiveness.Scientists have found that while a propensity for an exalted state of elation often does spur creative acts,it is usually not those with manic-depressive disease who are the most highly creative.Instead,it tends more often to be family members who have no overt symptoms of disorder.Researches found that people who at different levels displayed different actions based on a study of lifetime creativity.Contrary to conclusions based on earlier research by other scientists,but rather their near relatives,many of whom have very mild signs of the disorder,or who exhibit no symptoms at all.In addition,elated moods let creative people have the drive and ability to execute their ideas.Many among the most creative people are not prone to manic depression and are not related to people with the disorder,the conditionsthat can enhance a person's creativity are being found by psychologists,such as novel circumstances,being engaged in tasks, children whose parents accepting of their creative efforts.However,the pressure of competition,or being watched while one works tend to dampen creativity and competition ,evaluation and surveillance all make people prefer the safest option,hesitating to explore more creative and risky possibilities.。
Chapter five Summarizing 摘要写作
Focus 1 Uses of Summary-Writing
1. Summary writing enables people to get more out of their reading.
Why ?
forcing us to pay attention to what we read, for no one can write a summary of any piece of writing unless he has clearly grasped its meaning. So summarizing is excellent training. It makes us read with the mind as well as the eye.
3. Summary-writing has great practical value.
Why ?
The ability (to grasp quickly and accurately what is read or heard and to reproduce it briefly, clearly and concisely) is of great importance, particularly to lawyers, scholars, businessmen, and government officials.
2. Summary-writing is also a very good exercise. It teaches us to express thoughts clearly, concisely and effectively.
Why ?
Since we are required to express the main information in as few words as possible, we must learn to choose our words and construct our sentences carefully and to write in strictly logical order.
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Summary for chapter 5 Elasticity and its Application
This chapter tells us the conception of elasticity and uses it to analyze the different kinds of markets. The nine questions I conclude below are very important knowledge.
1.What is the price elasticity of demand?
A.The price elasticity of demand is a measure of the responsiveness of consumers to changes in
price. It is defined as the percentage change in the quantity demanded of a good divided by the percentage change in the price of the goods.
B.The price elasticity of demand is always a negative number because price and quantity
demanded are inversely related.
C.The price elasticity of demand is calculated as the percentage change in the price of the good, with the negative sign ignored.
2.How is it related to the demand curve?
A.As the price is lowed along a straight-line demand curve, the price elasticity of demand
declines.
B.The straight-line demand curve consists of three segments: the top part, which is elastic; the
unit-elastic region; and the bottom part, which is inelastic.
3.What determines whether consumers alter their purchases a little or a lot in response to a price change?
A.Everything else held constant, the greater the number of close substitutes, the greater the price
elasticity of demand.
B.Everything else held constant, the greater the proportion of a household’s budget that a good
constitutions, the greater the household’s elasticity of demand for that good.
C.Everything else held constant, the longer the time period under consideration, the greater the
price elasticity of demand.
4.Why are measurements of elasticity important?
Comparing the price elasticity of demand for various products/services allows economists to see how consumers respond to price changes. In other words, it can tell us how big a difference price makes in particular purchasing decision.
5.How does a business determine whether to increase or decrease the price of the product it sells in order to increase revenues?
A.If the price elasticity of demand is greater than 1, total revenue and price changes move
opposite directions. An increase in price causes a decrease in total revenue, and a decrease on price causes an increase in total revenue. If demand is inelastic, total revenue and price move in the same direction.
B.When the price elasticity of demand for one product differs among different groups easily
identified customers, firms can increase revenues by charging each group a different price.
The groups with elastic demands will receive lower prices than those with inelastic demands.
6.What is the price elasticity of supply?
The price elasticity of supply is defined as the percentage change in the quantity supplied of a good divided by the percentage change in the price of that good, everything else held constant.
7.How is it related to the supply curve?
A.The price elasticity of supply increases as the time period under consideration increases.
B.The short run is a period of time short enough that the quantities of at least some of the
resources cannot be varied. The long run is a period of time just long enough that the
quantities of all resources can be varied.
8.What are the income and cross-price elasticity of demand?
A.The income elasticity of demand is defined as the percentage change in the quantity
demanded of a good divided by the percentage change in income, everything else held constant.
B.The cross-price elasticity of demand is defined as the percentage change in the quantity
demanded for one good divided by the percentage change in the price of a related good, everything else held constant.
9.What is elasticity? What kinds of issues can elasticity help us understand?
A.Elasticity is a measure of the responsiveness of quantity demanded or quantity supplied to one
of its determinants.
B.The tools of elasticity can be applied in the market for wheat, oil and illegal drugs.。