AP Micro Elasticity Practice
Assessment
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Dena Goldberg
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Social Studies
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11th - 12th Grade
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180 plays
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Medium
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8 questions
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1.
Multiple Choice
Assume that demand for bottled water is relatively price elastic. An increase in supply of bottled water will result in which of the following?
A decrease in price, leading to an increase in total revenue
A decrease in price, leading to a decrease in total revenue
An excess supply of bottled water
An excess demand for bottled water
A relatively small decrease in price and no change in equilibrium quantity
2.
Multiple Choice
If a 10 percent increase in the price of a good leads to a 25 percent decrease in the quantity demanded of the good, demand is
relatively inelastic
relatively elastic
unit elastic
perfectly elastic
perfectly inelastic
3.
Multiple Choice
Assume a 10 percent increase in price increased the market quantity supplied by 20 percent. Which of the following is true?
The value of the price elasticity of supply is 2.
The value of the price elasticity of supply is 0.5.
Supply is price inelastic.
Demand is price elastic.
This price-quantity combination violates the law of supply.
4.
Multiple Choice
Assume that the price elasticity of supply for good Y is 0.5. If the price of good Y decreases by 30 percent, the quantity supplied of good Y will
decrease by 60 percent
decrease by 30 percent
decrease by 15 percent
increase by .5 percent
increase by .15 percent
5.
Multiple Choice
Assume the income elasticity of demand for good Z equals -5.0. Which of the following is true?
Good Z is a normal good.
Good Z must have an inelastic demand.
An increase in income will lead to a decrease in demand.
An increase in income will lead to an increase in demand.
The income effect of a price increase will be a decrease in quantity demanded at every price.
6.
Multiple Choice
If the income elasticity of demand for good X is negative and the cross-price elasticity of demand between good X and good Y is negative, which of the following must be true of good X?
X is a normal good and is a substitute for Y.
X is a normal good and is a complement to Y.
X is an inferior good and is a substitute for Y.
X is an inferior good and is a complement to Y.
X is a normal good and Y is an inferior good.
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