10. If own price elasticity of demand is 2, the demand for the good is characterized as ___________ and, to generate more revenue, the firm should marginally ___________ the price.
(a) elastic; increase (b) inelastic; increase (c) elastic; reduce (d) inelastic; reduce
11. Whenever I watch a movie I like to eat a bowl of cold cereal. For me, the cross-price elasticity of movies and cold cereal is thus:
(a) zero (b) positive (c) negative (d) it depends on the magnitude of the price change
12. Which of the following would likely have the most elastic demand?
(a) salt (b) cigarettes (c) electricity (d) Coca-Cola
13. If your demand for cheesecake is given by the equation QD = 12-2P. What is your elasticity of demand when the price is $5?
(a) 2 (b) 1/2 (c) -2 (d) 5
14. If marginal product is at a maximum, the
(a) marginal cost is at a minimum (b) average variable cost is at a maximum (c) total fixed cost is at a maximum (d) average total cost is at a maximum
10. If own price elasticity of demand is 2, the demand for the good is characterized as ___________ and, to generate more revenue, the firm should marginally ___________ the price.
(a) elastic; increase (b) inelastic; increase (c) elastic; reduce (d) inelastic; reduce
11. Whenever I watch a movie I like to eat a bowl of cold cereal. For me, the cross-price elasticity of movies and cold cereal is thus:
(a) zero (b) positive (c) negative (d) it depends on the magnitude of the price change
12. Which of the following would likely have the most elastic demand?
(a) salt (b) cigarettes (c) electricity (d) Coca-Cola
13. If your demand for cheesecake is given by the equation QD = 12-2P. What is your elasticity of demand when the price is $5?
(a) 2 (b) 1/2 (c) -2 (d) 5
14. If marginal product is at a maximum, the
(a) marginal cost is at a minimum (b) average variable cost is at a maximum (c) total fixed cost is at a maximum (d) average total cost is at a maximum
