Midterm Exam #2 Econ 101, Section 2 - Iowa State University Department Of Economics, 2004 Page 9
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12Figure-7
31.In Figure-7, if the government imposes a price floor of $2, the result will be ( b )
a.
equilibrium
b.
no different than before the minimum price is imposed
c.
excess demand
d.
demand will shift leftward
e.
excess supply
32.In Figure -7, at a temporary price of $4, ( b )
a.
all of the following
b.
a surplus occurs
c.
the supply curve will shift backward
d.
the demand curve will shift outward
e.
equilibrium will eventually occur at approximately $3.50
33.The price elasticity of demand measures the ( c )
a.
responsiveness of a good's price to a change in quantity demanded
b.
adaptability of suppliers when a change in demand alters the price of a good
c.
responsiveness of quantity demanded to a change in a good's price
d.
adaptability of buyers when there is a change in demand
e.
responsiveness of quantity supplied to a change in quantity demanded
34.A price elasticity of demand of -2 for a specific cola means that if the price increases 1 percent, the
quantity demanded of the cola will decrease by 2 percent.( a )
a.
True
b.
False
35.If the price elasticity of demand for Cheer detergent is -3.0, then a ( a )
a.
12 percent drop in price leads to a 36 percent rise in the quantity demanded
b.
12 percent drop in price leads to a 4 percent rise in the quantity demanded
c.
$1,000 drop in price leads to a 3,000-unit rise in the quantity demanded
d.
$1,000 drop in price leads to a 333-unit rise in the quantity demanded
e.
12 percent rise in price leads to a 36 percent rise in the quantity demanded
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