Midterm part 1 - economics exam PDF

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economics exam...

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1. As the period for firms to expand output is lengthened, the elasticity of the market supply curve will A: Increase 2. If a 30 percent decline in the price of gasoline leads to a 15 percent rise in expenditures on gasoline, the price elasticity of demand for gasoline in this range must be A: Elastic 3. The demand for which one of the following goods is most likely to be quite inelastic A: medical services 4. Suppose that Starbucks reduces the price of its premium coffee from $2.20 to $1.80 per cup, and as a result, the quantity sold per day increased from 350 to 450. Over this price range, the absolute value of the price elasticity of demand for Starbucks coffee is A: 1.25 5. if the price of a good falls by 5 percent, and as a result, total revenue increases by 5 percent, the good's price elasticity of demand is A: elastic...