AnswersTX-Economics Chamberlain P4 T1Elasticity and Incentives

2.2 Elasticity and Incentives Answers

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1
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Which statement best explains how elasticity and incentives work together?

A
An elastic good, such as a game, is more likely to respond to incentives.
B
An inelastic good, such as a game, is more likely to respond to incentives.
C
An elastic good, such as a game, is less likely to respond to incentives.
D
An inelastic good, such as a game, is less likely to respond to incentives.
2
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A reward or punishment that encourges people to behave in a certain way is called a(n)

A
want.
B
price ceiling.
C
equilibrium price.
D
incentive.
3

Goods that are considered to be needs tend to be

A
elastic when the price changes.
B
inelastic when the price changes.
C
elastic when the supply changes.
D
inelastic when the supply changes.
4

In the market, actions known as incentives affect

p
producers only.
c
consumers only.
c
consumers or producers.
n
neither consumers nor producers.
5

The graph shows the price of green tea compared to the amount supplied by producers.What does this graph suggest about green tea? Choose two answers.Green tea is elastic in terms of supply.Green tea is inelastic in terms of supply.Green tea is neither elastic nor inelastic.The supply of green tea changes sharply with the price.The quantity supplied of green tea does not change sharply with the price.

Question illustration
A
Green tea is elastic in terms of supply.
B
Green tea is inelastic in terms of supply.
C
Green tea is neither elastic nor inelastic.
D
The supply of green tea changes sharply with the price.
E
The quantity supplied of green tea does not change sharply with the price.
6

Which is an example of a product that is considered a need?

A
breakfast food
B
music player
C
sports equipment
D
video game
7

The graph shows the price of a good compared to the quantity demanded and the quantity supplied.On this graph, what does the green arrow represent?

Question illustration
a
an ineffective price floor set above equilibrium causing a surplus.
a
an effective price floor set below equilibrium causing a shortage.
a
an ineffective price ceiling set above equilibrium causing a surplus.
a
an effective price ceiling set below equilibrium causing a shortage.
8

Price controls on goods can be set by

A
consumers.
B
economists.
C
governments.
D
producers.
9

The government has set a price floor on bread. Manufacturers cannot sell loaves for less than $5.00, which is a dollar above the market price. What will most likely result from this price control?

T
The quantity demanded for bread will decrease, and the quantity supplied will increase.
T
The quantity demanded and quantity supplied for bread will increase.
T
The quantity demanded for bread will increase,and the quantity supplied will decrease.
T
The quantity demanded and quantity supplied for bread will decrease.
10

The lowest amount a manufacturer can pay factory workers is an example of

A
an incentive.
B
a price floor.
C
a price ceiling.
D
an elastic service.

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