【正文】 00, Q = 800 E) None of the above. Ans: C15. An increase in demand means a movement to a higher price along a given demand curve. Ans: FalseCHPATER 41. Rank the points A, B and C on the demand curve in the figure below in order of greatest to least elasticity of demand. A) C, A, B. B) B, A, C. C) A, B, C. D) They are of equal elasticity. E) More information is needed. Ans: C2. An increase in supply will lower price unless: A) supply is perfectly price inelastic. B) demand is perfectly price elastic. C) it is followed by a reduction in quantity demanded. D) demand is highly price inelastic. E) both demand and supply are highly price inelastic. Ans: B3. A straightline demand curve has which of the following properties? A) Constant slope and varying price elasticity. B) Constant ine elasticity with varying slope. C) Varying slope and varying cross elasticity. D) Constant slope and constant price elasticity. E) None of the above may be asserted in general. Ans: A4. If the burden of an excise tax is shifted forward pletely onto the consumer, we can say that: A) supply is perfectly price elastic. B) demand is perfectly price elastic. C) demand is more price elastic than supply. D) supply is price inelastic and demand is price elastic. E) none of the above. Ans: A5. In tight housing markets, rent controls are often applied to hold the price of housing to a reasonable level. What is the immediate effect of this price policy with respect to the allocative functions of prices, and the relative ines of tenants and landlords? A) The allocative function of prices is impaired, but the tenants are prevented from gaining at the expense of the landlords. B) The allocative function of prices is not impaired, and the tenants are prevented from gaining at the expense of landlords. C) The allocative function of prices is impaired, and the tenants who find housing gain at the expense of landlords. D) The allocative function of prices is not impaired, but the landlords gain at the expense of tenants who do not find housing. E) None of the above. Ans: C6. The price elasticity of supply shown in Figure 48 between points A and B is: A) .1. B) .5. C) 1. D) 5. E) none of the above. Ans: C7. Suppose that successive price reductions reduce total revenue. The supplier faces a demand curve that is, in this region: A) price elastic. B) unitary elastic. C) infinitely price elastic. D) indeterminate. E) price inelastic. Ans: E8. If its advocates are correct, the minimumwage bill passed by the House of Representatives would raise wages for nearly 7 million underpaid workers, but would have no noticeable effect on employment. The quotation implies that the demand for the labor services of the 7 million workers mentioned, with respect to the price of labor services, has elasticity equal to: A) 2. B) 5. C) 1. D) 0. E) .5 Ans: D9. A horizontal demand curve may be described as: A) relatively price elastic. B) perfectly price inelastic. C) relatively price inelastic. D) perfectly price elastic. E) unit elastic. Ans: D10. f a good is in fixed supply, then the incidence of a tax A) falls entirely on the consumers. B) falls mostly on the producers and partly on consumers. C) falls entirely on the producers. D) depends on the elasticity of demand. E) none of the above. Ans: C11. Refer to the Figure 413. What is the elasticity of the demand curve DD between points A and B? A) B) C) D) E) None of the above Ans: A12. Refer to Figure 413. What is the elasticity of the demand curve DD between points B and C? A) B) C) D) E) None of the above Ans: B13. Refer to Figure 413. What is the elasticity of the demand curve DD between points C and D? A) B) C) D) E) None of the above Ans: C14. If at a price of $8, quantity bought will be 3300 per day, and at $12, quantity bought will be 2700 per day, then the price elasticity of demand is approximately: A) B) C) D) E) Ans: B15. Given a relatively, but not perfectly, price elastic supply curve, an increase in demand will certainly: A) raise price but leave quantity sold unchanged. B) raise price and increase quantity sold. C) lower price, since supply cannot increase except through the inducement of higher price. D) reduce quantity sold but leave price unchanged. E) do none of the above, since increase in demand refers to a movement along a given demand curve. Ans: BCHAPTER 51. In the figure below, the drop in consumer surplus resulting from an increase in price from 5 to 10 is given by the area:A) FGH B) CEH C) FGDC D) CEGF E) DEG Ans: D2. A change in which of the following should not affect the demand for hot coffee? A) The price of coffee. B) The price of tea. C) Consumer ines. D) The weather. E) All the above affect the demand for coffee. Ans: A3. The paradox of value notes that: A) there is no rational explanation why people should set a high value on objects such as diamonds, which have little real usefulness. B) the price obtained from selling any modity may bear little relationship to the cost of producing it. C) supply and demand curves do very little to explain how value (or price) is determined. D) no one consumer has any control over the price (or value) of a modity, but consumers collectively do have such control. E) there is no consistent relationship between the total utility obtained from any modity and the price charged for it. Ans: E4. To be in equilibrium (., to maximize satisfaction), the consumer must: A) purchase no inferior goods. B) equalize the marginal utilitie