Sheet 6 - Market Demand

Faculty of Economics and Political Science
Second Year, English Section

Intermediate Microeconomics, Fall 2019
Dr. Heba Youssef, Dr. Sara Nada
Sheet (6)
Chapter 15: Market Demand
(Q1) TRUE/FALSE:
(1) If the demand curve is a linear function of price, then the price
elasticity of demand is the same at all prices.
(2) If the elasticity of demand curve for potatoes is -1.50 at all prices
higher than the current price, we would expect that when bad
weather reduces the size of the potatoes crop, total revenue of
potatoes producers will fall.
(3) In general, aggregate demand depends only on prices and total

income and not on income distribution.
(4) The market demand curve is simply the horizontal sum of the
individual demand curves.
(5) The demand function for apples has the quantity q = 1,000 - 10p. As
the price of apples changes from L.E.10 to L.E.20, the absolute value
of the price elasticity of demand for apples increases.
(6) If the demand curve for a good is given by the equation q = 2/p,
where q is quantity and p is price, then at any positive price, the
elasticity of demand will be -1.
(7) If the demand function is q = 3m/p, where m is income and p is

price, then the absolute value of the price elasticity of demand
decreases as price increases.
1
(8) The inverse demand for a good is given by p= 60 – 2q. Suppose that
the number of consumers doubles. (For each consumer in the market
another consumer with an identical demand function appears.) The
demand curve sifts to the right, doubling demand at every price,
while the slope of the demand curve stays unchanged.
(9) If the amount of money that people are willing to spend on a good
stays the same when its price doubles, then demand for that good
must have a price elasticity of demand smaller in absolute value than
1.
(10) If the price of cucumbers falls by L.E.2 per kilo, then the demand
for cucumbers will rise by 10 kilos. Therefore we can conclude that
the demand for cucumbers is elastic.
(11) If the demand curve were plotted on graph paper with logarithmic
scales on both axes, then its slope would be the elasticity of
demand.
(12) If the equation for the demand curve is q = 50 - 4p, then the ratio of
marginal revenue to price is constant as price changes.
(13) If consumer 1 has the demand function x 1 = 1,000 - 2p and

consumer 2 has the demand function x 2 = 500 - p, then the
aggregate demand function for an economy with just these two
consumers would be x = 1,500 - 3p for p < 500.
(Q2) MULTIPLE CHOICE QUESTIONS:
1. If the price elasticity of demand for strawberries is -0.60 when

strawberries are measured in kilos, then the price elasticity of demand
for strawberries when measured in grams will be
a. -0.15.
b. -2.40.
c. -0.30.
d. -1.20.
e. None of the above.
2
2. The demand function is described by the equation q(p) = 30 - p/3.
The inverse demand function is described by the equation
a. q(p) = 30 - 3p.
b. p(q) = 90 - 3q.
c. q(p) = 1/(30 - p/3).
d. p(q) = 1/30 - q/3.
e. p(q) = 30 - q/3.
3. If the demand function for tickets to a play is q = 3,800 - 95p, at what

price will total revenue be maximized?
a. L.E.80
b. L.E.40
c. L.E.20
d. L.E.10
4. The inverse demand function for soybeans is p = 68,000 - 5q. Total

revenue in this market will be maximized when the quantity of
soybeans produced is
a. 3,400 bushels.
b. 7,911 bushels.
c. 6800 bushels.
d. 13,600 bushels.
5. The inverse demand function for grapes is described by the equation

p = 518 - 5q, where p is the price in pounds per kilo and q is the
number of kilos of grapes demanded per week. When p = L.E.38 per
kilo, what is the price elasticity of demand for grapes?
a. -190/96
b. -5/518
c. -5/96
d. -96/38
e. -38/480
3
6. The demand for tickets to an opera concert is given by D(p) =
200,000 - 10,000p, where p is the price of tickets. If the price of
tickets is L.E.17, then the price elasticity of demand for tickets is
a. -11.33.
b. -8.50.
c. -17.
d. -2.83.
e. -5.67.
7. The demand for watches is Q = 1,000P-0.50m-1. Assume that per

capita income m is L.E.5,000. At a price P of L.E.50, the absolute
value of the price elasticity of demand is
a. 2.50.
b. 1.0.
c. 1.
d. 1.50.
e. 0.50.
8. The demand for apple is given by D (p) = (p + 1)-2, where p is the

price of apple. If the price of apple is L.E.20, then the price elasticity
of demand for apple is
a. -7.62
b. -3.81
c. -5.71
d. -3.81
e. -1.90

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Faculty of Economics and Political Science

Second Year, English Section

(3) In general, aggregate demand depends only on prices and total

(7) If the demand function is q = 3m/p, where m is income and p is

(13) If consumer 1 has the demand function x 1 = 1,000 - 2p and

(Q2) MULTIPLE CHOICE QUESTIONS:

1. If the price elasticity of demand for strawberries is -0.60 when

3. If the demand function for tickets to a play is q = 3,800 - 95p, at what

4. The inverse demand function for soybeans is p = 68,000 - 5q. Total

5. The inverse demand function for grapes is described by the equation

7. The demand for watches is Q = 1,000P-0.50m-1. Assume that per

8. The demand for apple is given by D (p) = (p + 1)-2, where p is the

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