If an increase in price from 1 to 2 per unit leads to an increase in quantity supplied from 20 to 100 units, then the value of price elasticity of supply is
a. 0.38
b. 2
c. 2.67
d. 4
e. 8
QUESTION 2If a tripling of price triples the quantity of a good supplied, the price elasticity of supply is
a. 3
b. 300
c. 1
d. -1
e. -3
QUESTION 3One reason why the price elasticity of demand for cigarettes is large for young smokers is that
a. they have large discretionary incomes
b. the price of cigarettes increased recently
c. they are no longer permitted to smoke in public
d. cigarette advertising on television has been banned
e. the proportion of income a young smoker spends on cigarettes is usually quite large
QUESTION 4The price elasticity of demand for cigarettes by adults is -1.3 while for young smokers it is -0.4 . A tax on cigarettes would lead to which of the following effects?
a. a smaller reduction in the quantity of cigarettes demanded by younger smokers than by older smokers
b. the same reduction in the quantity of cigarettes demanded by both age groups
c. a larger reduction in the quantity of cigarettes demanded by younger smokers than by older smokers
d. no impact on the quantity of cigarettes demanded by either group
e. not enough information to predict the impact
QUESTION 5Which of the following does not determine a good's price elasticity of demand?
a. the time interval considered
b. the number of substitutes there are for the good
c. expenditures on the good as a percentage of the total consumer budget
d. the slope of the demand curve
e. the more of a luxury a particular good is
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