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    If the price elasticity of demand is 5 for a certain firm's product, the firm's managers can expect total revenue to: a. Decrease b. Increase c. Remain constant d. Either increase or remain constant depending upon the size of the price increase. A 4% increase in the price of ketchup will lead to a 4.8% Drop in quantity demanded of hamburgers.

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    Sample Exam Questions for Ch3 Econ301(1)

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    If the price elasticity of demand is 5 for a certain firm's product, the firm's managers can expect total revenue to: a. Decrease b. Increase c. Remain constant d. Either increase or remain constant depending upon the size of the price increase. A 4% increase in the price of ketchup will lead to a 4.8% Drop in quantity demanded of hamburgers.

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    32 views1 page

    Sample Exam Questions For Ch3 Econ301

    Uploaded by

    katie
    If the price elasticity of demand is 5 for a certain firm's product, the firm's managers can expect total revenue to: a. Decrease b. Increase c. Remain constant d. Either increase or remain constant depending upon the size of the price increase. A 4% increase in the price of ketchup will lead to a 4.8% Drop in quantity demanded of hamburgers.

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    SampleexamquestionsforCh3Econ301

    1.Assumethatthepriceelasticityofdemandis5foracertainfirm'sproduct.Ifthefirmraises
    price,thefirm'smanagerscanexpecttotalrevenueto:
    A.Decrease
    b.Increase
    c.Remainconstant
    d.Eitherincreaseorremainconstantdependinguponthesizeofthepriceincrease
    2.Aswemovedownalongalineardemandcurve,thepriceelasticityofdemandbecomesmore
    a.Elastic
    B.Inelastic
    c.Loglinear
    d.Variable
    3.ThedemandforgoodXhasbeenestimatedbyQXd=123PX+4PY.SupposethatgoodXsells
    at$2perunitandgoodYsellsfor$1perunit.Calculatetheownpriceelasticity.
    a.0.2
    b.0.3
    c.0.5
    d.0.6
    Answer:D
    4.Ifappleshaveanownpriceelasticityof3.2weknowthedemandis:
    a.Unitary
    b.Indeterminate
    C.Elastic
    d.Inelastic
    5.SupposeQXd=10,0002PX+3PY4.5M,wherePX=$100,PY=$50,andM=$2,000.
    Whatistheownpriceelasticityofdemand?
    a.2.34
    b.0.78
    C.0.21
    d.1.21
    6.Ifthecrosspriceelasticitybetweenketchupandhamburgersis1.2,a4%increaseintheprice
    ofketchupwillleadtoa4.8%:
    a.Dropinquantitydemandedofketchup
    B.Dropinquantitydemandedofhamburgers
    c.Increaseinquantitydemandedofketchup
    d.Increaseinquantitydemandedofhamburgers

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