Dusty Rags, Inc provides janitorial services to retail stores. Dusty had been charging 10 per hour ...

Dusty Rags, Inc provides janitorial services to retail stores. Dusty had been charging 10 per hour and selling 400 hours of service per week at that rate. When he raised his price to 15 per hour, his customers cut back to 300 weekly hours of service. Which of the following is true?
 a. Revenue went from 4,000 per week to 4,500 per week, indicating that the demand curve for his services must have shifted to the right.
  b. Revenue went from 4,000 per week to 4,500 per week, indicating that the demand for his services must be elastic.
  c. Revenue went from 4,000 per week to 4,500 per week, indicating that the demand for his services must be inelastic.
  d. Revenue went from 400 to 300 per week, indicating that demand must be elastic.
  e. Revenue went from 10 to 15 per week, indicating that demand must be inelastic.

QUESTION 2

Along a linear demand curve, total revenue is maximized when demand is
 a. elastic
  b. inelastic
  c. unit elastic
  d. perfectly elastic
  e. perfectly inelastic

QUESTION 3

Along a linear demand curve, as the price rises, demand becomes more
 a. steep
  b. elastic
  c. inelastic
  d. unit elastic
  e. variable

QUESTION 4

If the sellers in the cigarette industry formed a cartel and decided to set price along a straight-line downward-sloping demand curve, which point would they choose if they wanted to gain the highest total revenue?
 a. The point nearest the vertical axis, where the price is highest.
  b. The point nearest the horizontal axis, where quantity demanded is greatest.
  c. One of the points higher up on the demand curve, where demand is elastic.
  d. One of the points lower down on the demand curve, where demand is inelastic.
  e. The point of unit elasticity, in the middle of the demand curve.

QUESTION 5

The total revenue curve that corresponds to a downward-sloping linear demand curve
 a. slopes downward
  b. slopes upward
  c. is a horizontal line
  d. first rises, then falls
  e. first falls, then rises

QUESTION 6

Along a downward-sloping linear demand curve,
 a. slope is constant and elasticity is changing
  b. slope is changing and elasticity is constant
  c. both slope and elasticity are constant
  d. both slope and elasticity are changing
  e. no generalizations can be made about slope

QUESTION 7

Along a straight-line downward-sloping demand curve, elasticity is
 a. constant, but its value cannot be determined without measurement
  b. constant and equal to an absolute value of one
  c. greater at higher prices
  d. greater at lower prices
  e. greater in the middle