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Microeconomics 5th Edition Krugman

Test Bank
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1. The price elasticity of demand measures the responsiveness of the change in the:
A) quantity demanded to a change in the price.
B) price to a change in the quantity demanded.
C) slope of the demand curve to a change in the price.
D) slope of the demand curve to a change in the quantity demanded.

2. When the price goes down, the quantity demanded goes up. The price elasticity of
demand measures:
A) how much the price goes down.
B) how much the equilibrium price goes up.
C) the responsiveness of the price change to an income change.
D) the responsiveness of the quantity change to the price change.

3. If the price of a good increases by 20% and the quantity demanded changes by 15%,
then the price elasticity of demand is equal to:
A) 0.75.
B) approximately 0.33.
C) approximately 1.33.
D) 1.

4. The price elasticity of demand is computed as the percentage change in the _____
divided by the percentage change in _____.
A) quantity demanded; the quantity supplied
B) price; the quantity demanded
C) quantity demanded; income
D) quantity demanded; the price

5. The price of gasoline rises 5% and the quantity of gasoline purchased falls 1%. The
price elasticity of demand is equal to _____, and demand is described as _____.
A) 0.2; inelastic
B) 5; inelastic
C) 0.2; elastic
D) 5; elastic

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6. The ratio of the percentage change in quantity demanded to the percentage change in
price is the _____ elasticity of demand.
A) price
B) quantity
C) income
D) cross-price

7. The price elasticity of demand measures the:


A) responsiveness of the change in quantity demanded to a change in price.
B) change in price versus a change in quantity demanded.
C) responsiveness of the change in the slope of the demand curve to a change in price.
D) change in the slope of the demand curve versus a change in the quantity demanded.

8. The price elasticity of demand is measured by _____ the percentage change in _____
the percentage change in _____.
A) dividing; price by; quantity demanded
B) dividing; quantity demanded by; price
C) subtracting; price from; quantity demanded
D) adding; price to; quantity demanded

9. For a normal demand curve, the price elasticity of demand will:


A) always be positive.
B) always be greater than 1.
C) usually be equal to 1.
D) always be negative.

10. The price elasticity of demand can be found by:


A) examining only the slope of the demand curve.
B) measuring absolute changes in price and quantity demanded.
C) comparing the percentage change in quantity demanded to the percentage change
in price.
D) knowing that when price changes, quantity demanded goes in the opposite
direction.

11. If the price of a good increases by 15% and quantity demanded changes by 20%, then
the price elasticity of demand is equal to:
A) 0.75.
B) approximately 0.33.
C) approximately 1.33.
D) 1.

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12. The price elasticity of demand measures the:
A) responsiveness of quantity demanded to a change in price.
B) responsiveness of price to a change in quantity demanded.
C) extent to which prices are flexible and respond to market forces.
D) responsiveness of demand when price is held constant and demand increases or
decreases.

13. Suppose the price of gasoline increases 10% and quantity of gasoline demanded in
Orlando drops 5% per day. Demand for gasoline in Orlando is:
A) price elastic.
B) price inelastic.
C) price unit-elastic.
D) perfectly price inelastic.

14. If the estimated price elasticity of demand for foreign travel is 4:


A) a 20% decrease in the price of foreign travel will increase quantity demanded by
80%.
B) the demand for foreign travel is inelastic.
C) a 10% increase in the price of foreign travel will increase quantity demanded by
40%.
D) a 20% increase in the price of foreign travel will increase quantity demanded by
80%.

15. Egg producers know that the price elasticity of demand for eggs is 0.1. If they want to
increase sales by 5%, they will have to lower price by:
A) 0.1%.
B) 1%.
C) 5%.
D) 50%.

16. Gas prices recently increased by 25%. In response, purchases of gasoline decreased by
5%. According to this finding, the price elasticity of demand for gas is:
A) 5.
B) 2.
C) 0.2.
D) 0.5.

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17. The only producer of chocolate bunnies in the world, Choco's Bunny Company, recently
expanded its production capacity from 1,000 to 2,000 bunnies per day. If the price
elasticity of demand for bunnies is 3.33, by how much will the company have to reduce
its price to sell the additional 1,000 bunnies (by the midpoint method)?
A) 2.5%
B) 25%
C) 125%
D) 20%

18. The Cozy Chair Company believes it can sell 200 chairs at $200 per chair or 300 chairs
at $150 per chair. Using the midpoint formula, what do they think is the price elasticity
of demand?
A) 2.5.
B) 1.4.
C) 0.7.
D) 0.5.

19. The publisher of an economics textbook finds that, when the book's price is lowered
from $70 to $60, sales rise from 10,000 to 15,000. By the midpoint method, the price
elasticity of demand is:
A) 500.
B) 50.
C) 3.5.
D) 2.6.

20. Suppose at $10 the quantity demanded is 100. When the price falls to $8, the quantity
demanded increases to 130. The price elasticity of demand between $10 and $8, by the
midpoint method, is approximately:
A) 1.17.
B) 1.50.
C) 0.85.
D) 1.00.

21. Use of the midpoint method to calculate the price elasticity of demand eliminates the
problem of computing:
A) different elasticities, depending on whether price decreases or increases.
B) different elasticities because price and quantity are inversely related on the demand
curve.
C) total revenue when price falls and demand is inelastic.
D) total revenue when price falls and demand is elastic.

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22. A men's tie store sold an average of 30 ties per day at $5 per tie but sold 50 of the same
ties per day at $3 per tie. The price elasticity of demand, by the midpoint method, is:
A) greater than zero but less than 1.
B) equal to 1.
C) greater than 1 but less than 3.
D) greater than 3.

23. A men's tie store sold an average of 30 ties per day at $5 per tie. The same store sold 60
of the same ties per day at $3 per tie. In this case, the price elasticity of demand (by the
midpoint method) is:
A) greater than zero but less than 1.
B) equal to 1.
C) greater than 1 but less than 3.
D) greater than 3.

24. A shirt manufacturer sold 10 dozen shirts per day at $4 per shirt but sold 15 dozen shirts
per day at $3 per shirt. The price elasticity of demand (by the midpoint method) is:
A) greater than zero but less than 1.
B) equal to 1.
C) greater than 1 but less than 3.
D) greater than 3.

25. If the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity
demanded increases from 190 bags to 210 bags, then the price elasticity of demand (by
the midpoint method) is:
A) 0.
B) 0.5.
C) 1.
D) 2.

26. If the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity
demanded increases from 180 bags to 220 bags, then the price elasticity of demand (by
the midpoint method) is:
A) 0.
B) 0.5.
C) 1.
D) 2.

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27. If the price of chocolate-covered peanuts decreases from $1.05 to $0.95 and the quantity
demanded increases from 180 bags to 220 bags, then the price elasticity of demand (by
the midpoint method) is:
A) 0.5.
B) 1.
C) 2.
D) greater than 2.

28. If the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity
demanded does not change, then the price elasticity of demand (by the midpoint
method) is:
A) 0.
B) 0.5.
C) 1.
D) 2.

29. If the price of chocolate-covered peanuts decreases from $1.10 to $0.95 and the quantity
demanded increases from 190 bags to 215 bags, then the price elasticity of demand (by
the midpoint method) is:
A) 1.25.
B) 0.52.
C) 0.84.
D) 2.

30. If the price of chocolate-covered peanuts decreases from $2.00 to $1.55 and the quantity
demanded increases from 180 bags to 220 bags, then the price elasticity of demand (by
the midpoint method) is:
A) 0.
B) 0.50.
C) 0.79.
D) 2.

31. If the price of chocolate-covered peanuts decreases from $1.15 to $1.05 and the quantity
demanded increases from 190 bags to 220 bags, then the price elasticity of demand (by
the midpoint method) is:
A) 0.5.
B) 1.
C) 2.
D) between 1 and 2.

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32. If the price of chocolate-covered peanuts decreases from $1.15 to $0.90 and the quantity
demanded increases from 0 bags to 400 bags, then the price elasticity of demand (by the
midpoint method) is:
A) 0.5.
B) 1.
C) 2.
D) greater than 2.

33. The price of notebooks is $5, and at that price consumers demand 12 notebooks. If the
price rises to $7, consumers will decrease quantity demanded to 4 notebooks. Using the
midpoint formula, what is the price elasticity of demand for notebooks?
A) 0.33
B) 3
C) 0.17
D) 6

34. When the price of pencils decreases from $3 to $1, the quantity demanded increases
from 100 to 200 pencils. By the midpoint method, the price elasticity of demand equals:
A) 0.17.
B) 0.5.
C) 0.67.
D) 1.5.

35. If the price of tacos increases from $1 to $2 and customers decrease their consumption
from 10 tacos to 8 tacos, what is the price elasticity of demand (by the midpoint
method)?
A) 1.5
B) 1
C) 0.33
D) 0.5

36. If the price of burritos increases from $4 to $6 and customers decrease their
consumption from 20 to 10 burritos, what is the price elasticity of demand (by the
midpoint method)?
A) 1.67
B) 0.67
C) 3
D) 2

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37. Suppose at $10 the quantity demanded is 100. When the price falls to $8, the quantity
demanded increases to 130. The price elasticity of demand (using the midpoint formula)
between $10 and $8 is approximately:
A) 1.17.
B) 1.50.
C) 0.85.
D) 1.00.

Use the following to answer questions 38-45:

38. (Table: Price Elasticity) Use Table: Price Elasticity. What is the price elasticity of
demand (using the midpoint formula) between $2.50 and $2.25?
A) 9
B) 19
C) 119
D) 0.5

39. (Table: Price Elasticity) Use Table: Price Elasticity. What is the price elasticity of
demand (using the midpoint formula) between $2.25 and $2.00?
A) 4.00
B) 5.67
C) 9.00
D) 17.60

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40. (Table: Price Elasticity) Use Table: Price Elasticity. What is the price elasticity of
demand (using the midpoint formula) between $2.00 and $1.75?
A) 2.33
B) 3.00
C) 4.00
D) 0.125

41. (Table: Price Elasticity) Use Table: Price Elasticity. What is the price elasticity of
demand (using the midpoint formula) between $1.75 and $1.50?
A) 0.42
B) 1.50
C) 1.86
D) 0.08

42. (Table: Price Elasticity) Use Table: Price Elasticity. What is the price elasticity of
demand (using the midpoint formula) between $1.50 and $1.25?
A) 1.00
B) 1.22
C) 1.50
D) 1.75

43. (Table: Price Elasticity) Use Table: Price Elasticity. What is the price elasticity of
demand (using the midpoint formula) between $1.25 and $1.00?
A) 0.60
B) 0.82
C) 1.00
D) 1.60

44. (Table: Price Elasticity) Use Table: Price Elasticity. What is the price elasticity of
demand (using the midpoint formula) between $1.00 and $0.75?
A) 0.54
B) 0.66
C) 0.75
D) 1.00

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45. (Table: Price Elasticity) Use Table: Price Elasticity. What is the price elasticity of
demand (using the midpoint formula) between $0.75 and $0.50?
A) 0.25
B) 0.33
C) 0.43
D) 0.52

46. Each month Jacquelyn spends exactly $50 on ice cream, regardless of the price of each
container. Jacquelyn's price elasticity of demand for ice cream is:
A) 0.
B) 1.
C) greater than 1.
D) less than 1 but greater than 0.

47. Each month Jessica buys exactly 15 Big Macs, regardless of the price. Jessica's price
elasticity of demand for Big Macs is:
A) 0.
B) 1.
C) greater than 1.
D) less than 1 but greater than 0.

48. Suppose the price elasticity of demand for cheeseburgers equals 0.37. This means the
overall demand for cheeseburgers is:
A) price elastic.
B) price inelastic.
C) price unit-elastic.
D) perfectly price inelastic.

49. The price elasticity of demand for skiing lessons in New Hampshire is over 1. This
means that the demand is _____ in New Hampshire.
A) price elastic
B) price inelastic
C) price unit-elastic.
D) perfectly price elastic

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50. A restaurant manager has estimated that the price elasticity of demand for meals is 2. If
the restaurant increases menu prices by 5%, she can expect the number of meals sold to
decrease by _____ and total revenue to _____.
A) 10%; increase
B) 5%; stay constant
C) 10%; fall
D) 2.5%; fall

51. You manage a nightclub, and lately revenues have been disappointing. Your bouncer
suggests that raising drink prices will increase revenues, but your bartender suggests
that decreasing drink prices will increase revenues. You aren't sure who is right, but you
do know that your bouncer thinks the demand for drinks is _____ and your bartender
thinks the demand for drinks is _____.
A) elastic; inelastic
B) inelastic; elastic
C) elastic; elastic
D) inelastic; inelastic

52. A perfectly price-inelastic demand curve is:


A) horizontal.
B) downward sloping.
C) upward sloping.
D) vertical.

53. A major state university in the South recently raised tuition by 12%. An economics
professor at this university asked his students, “How many of you will transfer to
another university because of the increase in tuition?” One student in about 300 said that
he or she would transfer. Based on this information, the price elasticity of demand for
education at this university is:
A) 1.
B) highly elastic.
C) highly inelastic.
D) 0.

54. A rancher in Oklahoma decides to raise the price of her beef by 19% over the prevailing
market price. If the demand for beef is perfectly elastic, this rancher's quantity
demanded will:
A) fall to 0.
B) not change.
C) fall slightly.
D) increase slightly.

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55. Sonik, a wireless phone company, tested the effect of a price reduction for text
messaging. It lowered prices from $0.08 to $0.04 per message and found that the
number of messages sent tripled. This means that the:
A) demand for text messaging is inelastic in this price range.
B) demand curve for text messaging shifted to the right.
C) supply curve for text messaging shifted to the left.
D) demand for text messaging is elastic in this price range.

56. Sometimes airlines raise ticket prices as the flight departure date approaches in the hope
of increasing revenue on the assumption that consumer demand is:
A) steady in its price elasticity as departure time approaches.
B) less price-elastic as departure time approaches.
C) always unit elastic.
D) very sensitive to price changes as the time of departure approaches.

57. The university president believes that increasing student tuition by 5% will increase
revenues. If the president is correct that revenues will increase, then the tuition increase
will _____ the number of students enrolling by _____%.
A) reduce; less than 5
B) reduce; more than 5
C) increase; exactly 5
D) increase; less than 5

58. The university hopes to raise more revenue by increasing parking fees. This plan will
work only if:
A) the price effect is larger than the quantity effect.
B) the price effect is smaller than the quantity effect.
C) the price effect and quantity effect are the same.
D) there is no price or quantity effect.

59. Suppose the price elasticity of demand for fishing lures equals 1.5 in South Carolina and
0.63 in Alabama. To increase revenue, fishing lure manufacturers should:
A) lower prices in each state.
B) raise prices in each state.
C) lower prices in South Carolina and raise prices in Alabama.
D) leave prices unchanged in South Carolina and raise prices in Alabama.

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60. Total revenue is:
A) total sales less total cost.
B) the price of a good times the quantity of the good that is sold.
C) the price effect times the quantity effect.
D) the price of a good divided by the amount of the good sold.

61. When the price of chocolate-covered peanuts decreases from $1.10 to $0.95, the
quantity demanded increases from 190 bags to 215 bags. If the price is $1.10, total
revenue is _____, and if the price is $0.95, total revenue is _____.
A) $209; $204.25
B) $209; $236.50
C) $236.50; $209
D) $180.50; $209

62. When the price of chocolate-covered peanuts decreases from $1.10 to $0.95, the
quantity demanded increases from 190 bags to 215 bags. In this price range, the demand
for chocolate covered peanuts is _____, and total revenue will _____ when price
decreases.
A) elastic; increase
B) elastic; decrease
C) inelastic; increase
D) inelastic; decrease

63. When the price of chocolate-covered peanuts increases from $1.55 to $2.00, the quantity
demanded decreases from 220 to 180. If the price is $1.55, total revenue is _____, and if
the price is $2.00, total revenue is _____.
A) $360; $440
B) $341; $279
C) $440; $279
D) $341; $360

64. When the price of chocolate-covered peanuts increases from $1.55 to $2.00, the quantity
demanded decreases from 220 to 160. In this price range, the demand for
chocolate-covered peanuts is _____, and total revenue will _____ when the price
increases.
A) elastic; increase
B) elastic; decrease
C) inelastic; increase
D) inelastic; decrease

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65. Suppose the price of barley increases by 16.53%. If breweries buy 3.28% less barley
after the price increase, the total revenue for barley producers will _____ because the
_____ effect is greater than the _____ effect.
A) decrease; quantity; price
B) increase; price; quantity
C) not change; quantity; price
D) increase; quantity; price

66. If demand is elastic, the _____ effect dominates the _____ effect, and a(n) _____ in
price will cause total revenue to rise.
A) price; quantity; decrease
B) price; quantity; increase
C) quantity; price; increase.
D) quantity; price; decrease

67. Suppose the price elasticity of demand for oranges is 1.8. If a fall frost destroys
one-third of the nation's orange crop, how will that affect total revenue from oranges, all
other things unchanged?
A) Total revenue will rise.
B) Total revenue will fall.
C) Total revenue will remain unchanged.
D) The information is insufficient to answer the question.

68. The price elasticity of demand for gasoline in the short run has been estimated to be 0.4.
If a war in the Middle East causes the price of oil (from which gasoline is made) to
increase, how will that affect total revenue from gasoline in the short run, all other
things unchanged?
A) Quantity demanded will stay the same; total revenue will fall.
B) Quantity demanded will decrease; total revenue will rise.
C) Total revenue will remain unchanged.
D) Quantity demanded will not change; total revenue will rise.

69. The price elasticity of demand for lettuce has been estimated to be 2.58. If an insect
infestation destroys 10% of the nation's lettuce crop, how will that affect total revenue
from lettuce, all other things unchanged?
A) Total revenue will remain unchanged.
B) Total revenue will fall.
C) Total revenue will rise.
D) The information is insufficient to answer the question.

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70. The price elasticity of demand for fresh tomatoes has been estimated to be 2.22. If a new
insecticide and fertilizer treatment yields a 20% increase in the nation's fresh tomato
crop, how will that affect total revenue from fresh tomatoes, all other things unchanged?
A) Total revenue will remain unchanged.
B) Total revenue will fall.
C) Total revenue will rise.
D) The information is insufficient to answer the question.

71. Which statement is NOT true regarding a price-elastic demand curve?


A) Total revenue increases when the price falls.
B) The absolute value of the price elasticity is a fraction greater than 0 but less than 1.
C) The absolute value of the price elasticity is greater than 1.
D) The percent changes in the quantity demanded exceed the percent changes in the
price for any small change in price.

72. The demand for agricultural output is price inelastic. This means that if farmers, taken
collectively, have a bumper crop, they will have _____ prices, _____ quantities sold,
and _____ incomes.
A) lower; greater; lower
B) lower; greater; higher
C) lower; lower; lower
D) higher; higher; higher

73. When a public transit system (such as a subway or bus line) raises its fares, its total
revenue may increase. This suggests that demand is:
A) unstable.
B) price-inelastic.
C) price-elastic.
D) price unit-elastic.

74. If a university decreases the price of tickets to football games to collect more revenue, it
is assuming that the demand for tickets is:
A) unstable.
B) price-inelastic.
C) price-elastic.
D) price unit-elastic.

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75. If the demand for golf is price-inelastic and your local public golf course increases the
greens fees for using the course, you expect:
A) a decrease in total revenue received by the course.
B) an increase in total revenue received by the course.
C) an increase in the amount of golf played on the course.
D) no change in the amount of golf played on the course.

76. If the demand for golf is unit-price elastic and your local public golf course increases
the greens fees for using the course, you expect:
A) a decrease in total revenue received by the course.
B) an increase in total revenue received by the course.
C) a decrease in the amount of golf played on the course.
D) no change in the amount of golf played on the course.

Use the following to answer questions 77-79:

77. (Figure: Demand for Notebook Computers) Use Figure: The Demand for Notebook
Computers. The change in total revenue resulting from a change in price from P to T
suggests that demand is:
A) inelastic.
B) price-elastic.
C) price-inelastic.
D) price unit-elastic.

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78. (Figure: Demand for Notebook Computers) Use Figure: The Demand for Notebook
Computers. Total revenue at point S equals the:
A) distance 0P.
B) distance MS.
C) area 0TUM.
D) area 0PSM.

79. (Figure: Demand for Notebook Computers) Use Figure: The Demand for Notebook
Computers. Total revenue at point V equals the:
A) area 0TVN.
B) area 0PSVN.
C) distance 0T.
D) distance NV.

80. If a change in price causes total revenue to change in the same direction, we can
conclude that the demand is:
A) price inelastic.
B) price elastic.
C) price unit-elastic.
D) zero elastic.

81. There is one gas station in a small rural town. The owner of the station claims that he
will sell the same quantity of gas no matter how high or low the price. If he is correct in
this assertion, the demand curve for gas at his station must be _____, with a price
elasticity of _____.
A) vertical; zero
B) vertical; infinity
C) horizontal; zero
D) horizontal; infinity

82. Demand for vegetables at a small farmers' market is steady, but the supply of vegetables
has decreased because of a drought. This is good news for farmers if demand is _____
and the _____ effect outweighs the _____ effect.
A) inelastic; price; quantity
B) elastic; price; quantity
C) inelastic; output; price
D) elastic; output; price

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83. In the market for computers, if the demand curve is elastic and the price of a computer
decreases, we expect total revenue to _____. If the demand curve is inelastic and the
price of a computer decreases, we expect total revenue to _____.
A) increase; decrease
B) increase; increase
C) decrease; increase
D) decrease; decrease

84. If a 20% price increase generates a 20% decrease in quantity demanded, then this is a(n)
_____ response.
A) inelastic
B) elastic
C) unit-elastic
D) perfectly elastic

85. If an increase in the price of cotton increases total revenue, then the price effect is _____
the quantity effect.
A) equal to
B) stronger than
C) weaker than
D) not comparable to

86. After a price decrease, the quantity effect tends to:


A) decrease total revenue.
B) increase total revenue.
C) make the price effect stronger.
D) make the price effect weaker.

87. Yovanka has diabetes, and she will pay any amount of money for insulin. What is the
BEST characterization of Yovanka's demand for insulin?
A) price-inelastic
B) price-elastic
C) perfectly price-inelastic
D) perfectly price-elastic

88. When demand is _____, a rise in price leads to a(n) _____ in total revenue.
A) perfectly inelastic; decrease
B) perfectly elastic; increase
C) inelastic; increase
D) elastic; increase

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Use the following to answer questions 89-90:

89. (Figure: Demand Curves) Use Figure: Demand Curves. Which graph shows a perfectly
elastic demand curve?
A) A
B) B
C) C
D) D

90. (Figure: Demand Curves) Use Figure: Demand Curves. Which graph shows a perfectly
inelastic demand curve?
A) A
B) B
C) C
D) D

91. Suppose that an increase in the price of a good leads to an increase in total revenue.
Ignoring other factors (like supply), at its current price the good must be:
A) price-inelastic.
B) price-elastic.
C) perfectly price-elastic.
D) inferior.

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92. When the percentage change in quantity demanded is larger than the percentage change
in price, demand is said to be:
A) price-inelastic.
B) price unit-elastic.
C) price-elastic.
D) perfectly price-inelastic.

93. If the price elasticity of demand is calculated to be 0.75, then demand is:
A) price-inelastic.
B) price-elastic.
C) price unit-elastic.
D) positively sloped.

94. If the price elasticity of demand is found to be 6, then demand is:


A) price-inelastic.
B) price-elastic.
C) price unit-elastic.
D) horizontal.

95. If the price of a good increases by 15% and the quantity demanded falls by 20%,
demand is:
A) price-elastic.
B) price-inelastic.
C) price unit-elastic.
D) normal.

96. If total revenue goes up when the price falls, demand is said to:
A) be price-inelastic.
B) be price unit-elastic.
C) be price-elastic.
D) have positive price elasticity.

97. If total revenue goes down when the price falls, demand is said to:
A) be price-inelastic.
B) be price unit-elastic.
C) be price-elastic.
D) have positive price elasticity.

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98. If the quantity demanded of agricultural output is very unresponsive to a fall in price,
the demand for agricultural output is:
A) price-elastic.
B) price-inelastic.
C) positively sloped.
D) horizontal.

99. Total revenue will decrease if the price goes _____ and demand is _____.
A) up; perfectly price-inelastic
B) up; price-inelastic
C) down; price-elastic
D) up; price-elastic

100. If demand _____ and the University of Michigan increases the price of football tickets,
revenues will increase.
A) is price-inelastic
B) is price-elastic
C) has price elasticity equal to 1
D) is perfectly price-elastic

Use the following to answer questions 101-102:

101. (Figure: Estimating Price Elasticity) Use Figure: Estimating Price Elasticity. Between
the two prices, P1 and P2, which demand curve has the LOWEST price elasticity?
A) D1
B) D2
C) D3
D) D4

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102. (Figure: Estimating Price Elasticity) Use Figure: Estimating Price Elasticity. Between
the two prices, P1 and P2, which demand curve has the HIGHEST price elasticity?
A) D1
B) D2
C) D3
D) D4

103. The price elasticity of demand along a demand curve with a constant slope:
A) is equal to the slope.
B) is greater than the slope.
C) is less than the slope.
D) increases in absolute value as the price rises.

104. The price elasticity of demand along a demand curve with a constant slope:
A) is equal to the slope.
B) is greater than the slope.
C) is less than the slope.
D) decreases in absolute value as quantity demanded rises.

105. On a linear demand curve:


A) demand is elastic at high prices.
B) demand is inelastic at high prices.
C) elasticity is the same at all points on the demand curve.
D) demand is elastic at low prices.

106. A linear demand curve has:


A) a constant price elasticity of demand.
B) a price elasticity of demand equal to one at all prices.
C) a calculated price elasticity of demand that is positive.
D) both elastic and inelastic price elasticities of demand.

107. On a linear demand curve, the price elasticity of demand at very high prices will be:
A) price-inelastic.
B) price-elastic.
C) price unit-elastic.
D) perfectly price-inelastic.

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108. On a linear demand curve, demand at very low prices will be:
A) price-inelastic.
B) price-elastic.
C) price unit-elastic.
D) perfectly price-elastic.

109. As you move down a linear demand curve, the price elasticity of demand will:
A) increase.
B) decrease.
C) increase and then decrease.
D) decrease and then increase.

110. The demand for strawberry ice cream tends to be relatively price-elastic because:
A) for most people, there are many close substitutes for strawberry ice cream.
B) it costs so little.
C) it has to be consumed very quickly.
D) it is only popular in the summer.

111. Which factor does NOT determine the price elasticity of demand?
A) the number of available substitutes
B) the time available to adjust to price changes
C) the proportion of the budget spent on the item
D) the slope of the supply curve

112. If a good is a necessity with few substitutes, all others things equal, then demand will
tend to:
A) be more price-elastic.
B) be less price-elastic.
C) have price elasticity equal to 1.
D) be the same as that of a luxury good.

113. If a good has a price-inelastic demand, then which statement is NOT likely to be
characteristic of this good?
A) It is a necessity and is relatively small proportion of the household budget.
B) It has many substitutes.
C) Consumers spend a small percentage of their income on it.
D) Consumers do not have much time to adjust to market changes.

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114. There are several close substitutes for Bayer aspirin but fewer substitutes for a complete
medical examination. Therefore, all other things equal, you would expect the demand
for:
A) medical examinations to be more price-elastic than is the demand for Bayer aspirin.
B) Bayer aspirin to be more price-elastic than is the demand for medical examinations.
C) Bayer aspirin to be more perfectly price-inelastic.
D) the two to be equally price-elastic.

115. If the price of emergency visits to the doctor rose, we would expect:
A) a large decline in the number of emergency visits to the doctor.
B) only a slight decline in the number of emergency visits to the doctor.
C) the number of emergency visits to the doctor to increase.
D) the total income of doctors to fall dramatically.

116. If someone did not regard health care as very important, often using home remedies and
other substitutes, his or her demand curve for health care would most likely be more
_____ than that of other people.
A) price-elastic
B) price-inelastic
C) upward-sloping
D) bowed-out

117. The price elasticity of demand for a good will tend to be larger:
A) the longer the time available to adjust to price changes.
B) the fewer number of substitute goods available.
C) if it is a staple.
D) if it is relatively inexpensive.

118. Determining the price elasticity of demand does NOT involve:


A) the slope of the supply curve.
B) the proportion of the budget spent on the item.
C) time available to adjust to price changes.
D) the number of available substitutes.

119. If a good is a necessity with few substitutes, then demand will tend to:
A) be relatively price-elastic.
B) be relatively price-inelastic.
C) have price elasticity equal to 1.
D) be the same as that of a luxury good.

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120. If a good is a luxury item that looms large in the household budget, then demand will
tend to:
A) be relatively price-elastic.
B) be relatively price-inelastic.
C) have price elasticity equal to 1.
D) be the same as that of a necessity.

121. An important determinant of the price elasticity of demand is:


A) time available to adjust to price changes.
B) the price of related goods.
C) the level of technology.
D) the quantity of the good supplied.

122. An important determinant of the price elasticity of demand is the:


A) price of related goods.
B) level of technology.
C) availability of substitutes.
D) quantity of the good supplied.

123. Other things being equal, the price elasticity of demand for a product will be lower:
A) if many substitutes are available.
B) if it is a large part of the consumer's budget.
C) in the long run than in the short run.
D) if there are few or no substitutes available.

124. There are several close substitutes for Quaker State oil but fewer substitutes for a
complete checkup of your car's engine. We can expect the demand for:
A) Quaker State oil to be more price-inelastic than is demand for engine checkups.
B) the two to be equally price-elastic.
C) car checkups to be more price-elastic than is demand for Quaker State oil.
D) Quaker State oil to be more price-elastic than is demand for engine checkups.

125. An important determinant of the price elasticity of demand is the:


A) proportion of the household budget spent on the good.
B) level of technology.
C) quantity of the good supplied.
D) extent of government regulation.

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126. A newspaper typically consumes a smaller fraction of a consumer's budget than a home
entertainment system. Therefore, you would expect the demand for:
A) a home entertainment system to be more price-elastic.
B) a home entertainment system to be more price-inelastic.
C) newspapers to be more price-elastic.
D) the two to be equally price-elastic.

127. The demand for textbooks is price-inelastic. Which statement would explain this
phenomenon?
A) Many alternative textbooks can be used as substitutes.
B) Students have a lot of time to adjust to price changes.
C) Textbook purchases consume a large portion of most students' income.
D) Textbooks are a necessity for most students.

128. After you graduate from college, you open a business selling computers. Many other
businesses in your city sell similar but not identical computers. Based on this
information, the price elasticity of demand for the computers that your business sells
will be:
A) 1.
B) 0.
C) highly elastic.
D) highly inelastic.

129. The price elasticity of demand for a good such as water is likely to be very low because:
A) the price is a small percentage of most budgets.
B) water has some good substitutes.
C) water is considered a luxury.
D) the share of income spent on water is large.

130. The price elasticity of a good will tend to be larger:


A) the longer the relevant time period for behavior change.
B) the fewer the number of substitute goods available.
C) if it is a staple or necessity with few substitutes.
D) if the share of income spent on the good is small.

131. Which good is likely to have the LARGEST price elasticity of demand?
A) a bicycle
B) a mountain bike
C) a Cannondale mountain bike
D) a green Cannondale mountain bike

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132. A good is likely to have an inelastic demand curve if the:
A) consumer has significant time to respond to the price change.
B) good has few available substitutes.
C) good is a luxury.
D) good accounts for a large share of consumer income.

133. We predict the long-run price elasticity of demand for gasoline to be _____ the
short-run price elasticity of demand for it.
A) less than
B) larger than
C) equal to
D) not comparable to

134. If a good is very inexpensive but is a necessity, you predict that demand for the good:
A) is price-elastic.
B) is price-inelastic.
C) is price unit-elastic.
D) has indeterminable price elasticity.

135. In general, we predict demand for Gala apples to be:


A) price-elastic.
B) price-inelastic.
C) perfectly price-elastic.
D) perfectly price-inelastic.

136. The cross-price elasticity of electricity with respect to the price of natural gas has been
estimated as being equal to 0.2. This implies that:
A) natural gas and electricity are both normal goods.
B) electricity and natural gas are complements.
C) electricity and natural gas are substitutes.
D) one of the two goods is inferior and the other is normal, but we need additional
information to determine which of them is normal.

137. For which goods is the cross-price elasticity of demand MOST likely a large positive
number?
A) hockey pucks and hockey sticks
B) DVDs and milk
C) french fries and onion rings
D) all of these because the cross-price elasticity is always a positive number

Page 27
138. Suppose the cross-price elasticity of demand for butter and margarine is equal to 0.96
but the cross-price elasticity for water and lemons is –0.13. This means that butter and
margarine are _____, while water and lemons are _____.
A) complements; substitutes
B) substitutes; complements
C) inelastic goods; elastic goods
D) elastic goods; complements

139. Suppose the cross-price elasticity between demand for Chipotle burritos and the price of
Qdoba burritos is 0.8. If Qdoba increases the price of its burritos by 10%:
A) Chipotle will sell 10% more burritos.
B) Chipotle will sell 8% more burritos.
C) Chipotle will sell 8% fewer burritos.
D) We cannot tell what will happen to Chipotle, but Qdoba will sell 8% fewer
burritos.

140. Suppose the price of cereal rose by 25% and the quantity of milk sold decreased by
50%. We know that the:
A) cross-price elasticity between cereal and milk is –2.
B) cross-price elasticity between cereal and milk is –0.5.
C) price elasticity of demand for milk is 2.
D) cross-price elasticity of demand between cereal and milk is 2.

141. If two goods are substitutes, their cross-price elasticity of demand should be:
A) less than 0.
B) negative but almost equal to 0.
C) equal to 0.
D) greater than 0.

142. If two goods are complements, their cross-price elasticity of demand is:
A) less than 0.
B) equal to 0.
C) positive but almost equal to 0.
D) greater than 0.

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143. If the price of chocolate-covered peanuts increases and the demand for strawberry
licorice twists increases, this indicates that these two goods are _____ goods.
A) complementary
B) normal
C) inferior
D) substitute

144. The pair of items that is likely to have the LARGEST positive cross-price elasticity of
demand is:
A) coffee and tea.
B) skis and ski boots.
C) pizza and pepperoni.
D) milk and cookies.

145. The cross-price elasticity of demand of complementary goods is:


A) less than 0.
B) equal to 0.
C) greater than 0.
D) between 0 and 1.

146. If the price of chocolate-covered peanuts increases and the demand for
strawberry-flavored soft drinks decreases, this indicates that these two goods are _____
goods.
A) unrelated
B) complementary
C) inferior
D) substitute

147. The pair of items that is MOST likely to have a negative cross-price elasticity of
demand is:
A) aspirin and hamburgers.
B) hot dogs and mustard.
C) margarine and butter.
D) ketchup and coffee.

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148. If your purchases of good A increase from 9 units per year to 11 units per year when the
price of good B increases from $8 to $12, all other things equal, for you, good A and
good B are considered _____ goods.
A) inferior
B) luxury
C) substitute
D) complementary

149. If your purchases of good A decrease from 11 units per year to 9 units per year when the
price of good B increases from $8 to $12, all other things equal, for you, good A and
good B are considered _____ goods.
A) inferior
B) luxury
C) substitute
D) complementary

150. If your purchases of good A remain constant at 9 units per year when the price of good
B increases from $8 to $12, all other things equal, for you, shoes and shirts are
considered _____ goods.
A) inferior
B) unrelated
C) substitute
D) complementary

151. The cross-price elasticity of demand for Coke with respect to the price of Pepsi has been
estimated to be 0.61. If the price of Pepsi falls by 10%, all other things unchanged, the
quantity demanded of Coke will:
A) decrease by less than 6.1%.
B) decrease by 6.1%.
C) not change because many people prefer Coke to Pepsi.
D) increase.

152. Suppose that the cross-price elasticity of demand for Mountain Dew with respect to the
price of Coke is 0.7. This implies that the two goods are:
A) substitutes.
B) complements.
C) inferior.
D) normal.

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153. Which pair of goods is MOST likely to have a cross-price elasticity of demand that is
greater than zero?
A) shoes and shoelaces
B) apples and bananas
C) pancakes and bacon
D) gasoline and cars

154. If you know the cross-price elasticity between two goods is positive, then it suggests
that the two goods are:
A) substitutes.
B) complements.
C) normal goods.
D) inferior goods.

155. Raina consumes 100% more mechanical pencils when the price of felt-tip pens increases
by 50%. For Raina, pencils and pens are _____, and the cross-price elasticity of demand
is _____.
A) complements; 0.5
B) substitutes; –0.5
C) complements; 2
D) substitutes; 2

156. Goods are _____ when the cross-price elasticity of demand is positive and _____ when
the cross-price elasticity of demand is negative.
A) substitutes; complements
B) complements; substitutes
C) elastic; inelastic
D) inelastic; elastic

157. The percentage change in quantity demanded of one good or service divided by the
percentage change in the price of a related good or service is the _____ of demand.
A) price elasticity
B) quantity elasticity
C) income elasticity
D) cross-price elasticity

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158. If two goods are substitutes, their cross-price elasticity of demand is:
A) less than 0.
B) greater than 0.
C) equal to 0.
D) impossible to determine without more information.

159. If two goods are complements, their cross-price elasticity of demand is:
A) less than 0.
B) equal to 0.
C) greater than 0.
D) impossible to determine without more information.

160. The cross-price elasticity of demand of substitute goods is:


A) less than 0.
B) greater than 0.
C) equal to 0.
D) impossible to determine without more information.

161. Since the demand for cashews increases as the price of walnuts increases, we can
assume that these two goods are:
A) unrelated.
B) superior.
C) inferior.
D) substitutes.

162. The pair of items that is likely to have the HIGHEST cross-price elasticity of demand is:
A) baseball and baseball glove.
B) spaghetti and meatballs.
C) coffee and tea.
D) peanut butter and jelly.

163. If two goods are complementary, we can assume that the cross-price elasticity of
demand for these goods is:
A) greater than 1 .
B) equal to 0.
C) less than 0.
D) impossible to determine without more information.

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164. The price of pretzels increases and the demand for tortilla chips decreases, so we can
assume that these two goods are:
A) unrelated.
B) inferior.
C) complementary.
D) substitutes.

165. The pair of items that is MOST likely to have a negative cross-price elasticity of
demand is:
A) cashews and peanuts.
B) hamburgers and ketchup.
C) coffee and tea.
D) mustard and aspirin.

166. The percent change in quantity demanded of a good divided by the percent change in
income, all other things unchanged, is the _____ elasticity of demand.
A) price
B) quantity
C) income
D) cross-price

167. If the income elasticity of demand for a good is positive, the good is said to be:
A) inferior.
B) a substitute.
C) normal.
D) positive.

168. The income elasticity of demand of a normal good is always:


A) greater than 0.
B) less than 0.
C) equal to 0.
D) impossible to determine without more information about the type of good in
question.

169. If your income increases and your consumption of bagels increases, other things equal,
bagels are considered a(n) _____ good.
A) negative
B) positive
C) inferior
D) normal

Page 33
170. If the income elasticity of demand for a good is negative, the good is said to be:
A) inferior.
B) negative.
C) positive.
D) normal.

171. If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when your
income increases from $19,000 to $21,000 a year, other things equal, for you, shoes are
considered a(n) _____ good.
A) normal
B) inferior
C) complementary
D) substitute

172. If your purchases of shoes decrease from 11 pairs per year to 9 pairs per year when your
income increases from $19,000 to $21,000 a year, other things equal, for you, shoes are
considered a(n) _____ good.
A) normal
B) inferior
C) complementary
D) substitute

173. The income elasticity of demand for peaches has been estimated to be 1.43. If income
grows by 15%, all other things unchanged, total revenue will:
A) rise.
B) fall.
C) remain unchanged.
D) The information is insufficient to answer the question.

174. The income elasticity of demand for eggs has been estimated to be 0.57. If income
grows by 5% in a period, all other things unchanged, demand will:
A) increase by more than 5.7%.
B) increase by about 2.9%.
C) decrease by more than 5.7%.
D) decrease by less than 5.7%.

Page 34
175. Eric's income increased from $40,000 to $50,000 per year. Eric's consumption of tickets
to pro football games increased from two to four per year. By the midpoint formula, his
income elasticity of demand for pro football game tickets is equal to _____, and football
game tickets are _____ goods.
A) –0.33; inferior
B) +0.67; normal
C) –3; inferior
D) +3; normal

176. Nico rents 10% more DVDs when his income increases by 20%. Based on this
information, we know that DVDs:
A) are a normal good.
B) are an inferior good.
C) have many substitutes.
D) have come down in price.

177. If the income elasticity for hybrid cars is positive:


A) there are many substitutes for hybrid cars.
B) there are few substitutes for hybrid cars.
C) hybrid cars are a normal good.
D) hybrid cars are an inferior good.

178. Kayla and Jada are roommates in New York City. Both Kayla and Jada recently
received raises. Kayla now purchases more mp3 albums online than before, but Jada
buys fewer. Kayla behaves as if mp3 albums are _____ goods, and Jada's income
elasticity of demand for mp3 albums is _____.
A) normal; positive
B) normal; negative
C) inferior; positive
D) inferior; negative

179. When Joe's income is $100 per week, he spends $20 per week on pizza. When his
income rises to $110 per week, he spends $25 per week on pizza. If the price of pizza
remained constant during this time, this information implies that, for Joe:
A) pizza is a normal good.
B) pizza is an inferior good.
C) pizza is a substitute good.
D) demand for pizza is price-elastic.

Page 35
180. Suppose you manage a convenience mart and are in charge of ordering products, but the
home office sets the prices. In your area, the income elasticity of demand for peanut
butter is –0.5. Because of local factory closings, you expect local incomes to decrease
by 20% on average in the next month. As a result, you should stock _____ peanut
butter.
A) 20% more
B) 5% more
C) 10% more
D) 10% less

Use the following to answer questions 181-184:

181. (Table: Market for Pizza) When income changes from $1,000 to $1,400 per month, the
income elasticity of demand for pizza, by the midpoint method, at a price of $14 per
pizza is:
A) –1.
B) 1.
C) 1.25.
D) 1.5.

182. (Table: Market for Pizza) If income changes from $1,000 to $1,400 per month, by the
midpoint method, the income elasticity of demand at a price of $10 per pizza is:
A) 1.2.
B) –1.2.
C) 0.825.
D) 0.40.

Page 36
183. (Table: Market for Pizza) If income changes from $1,000 to $1,400 per month, by the
midpoint method, the income elasticity of demand at a price of $18 per pizza is:
A) 0.33.
B) 0.50.
C) 0.95.
D) 2.

184. (Table: Market for Pizza) Look at the table Market for Pizza and use the midpoint
method. The price elasticity of demand for pizza between $14 and $12 per pizza when
income is $1,000 per month is:
A) 0.6.
B) 1.
C) 1.6.
D) 2.

185. Which statement is TRUE?


A) When the income elasticity of demand is positive, the good is inferior.
B) When the income elasticity of demand is negative, the good is normal.
C) Income elasticity of demand measures how much the quantity demanded of a good
is affected by changes in consumers' incomes.
D) Income elasticity of demand measures the effect of the change in one good's price
on the quantity demanded of the other good.

186. If the income elasticity of demand for a good is _____, the good is said to be _____.
A) positive; inferior
B) negative; a substitute
C) positive; normal
D) positive; positive

187. For a good to be considered normal, the _____ elasticity of demand must be _____.
A) income; between 1 and 0
B) cross-price; less than 0
C) cross-price; equal to 0
D) income; greater than 0

Page 37
188. If your income increases and your consumption of a good increases, for you, that good
is considered:
A) negative.
B) positive.
C) inferior.
D) normal.

189. If the income elasticity of demand for a good is _____, the good is said to be _____.
A) negative; inferior
B) negative; negative
C) positive; positive
D) negative; normal

190. The income elasticity of demand of an inferior good:


A) is less than 0.
B) is equal to 0.
C) is greater than 0.
D) cannot be determined.

191. Assume that as your income increases, your consumption of burgers increases. We can
assume that you consider burgers a(n) _____ good.
A) negative
B) positive
C) inferior
D) normal

192. The consumption of a(n) _____ good increases when income decreases.
A) substitute
B) complementary
C) normal
D) inferior

193. The income elasticity of demand measures:


A) how much the quantity demanded changes in response to a price change.
B) how much a consumer can buy at given income levels.
C) how much consumer purchasing power is affected when prices change.
D) how the quantity demanded of a good changes in response to changes in income.

Page 38
194. If an increase in income leads to a decrease in the demand for a good, then the good is
said to be:
A) normal.
B) a luxury.
C) inferior.
D) a staple.

195. If an increase in income leads to an increase in the demand for a good, then the good is
said to be:
A) normal.
B) a luxury.
C) inferior.
D) a staple.

196. For a normal good, the income elasticity of demand will be:
A) negative.
B) positive.
C) zero.
D) determined by the direction of the change in income.

197. For an inferior good, the income elasticity of demand will be:
A) negative.
B) positive.
C) zero.
D) determined by the direction of the change in income.

Use the following to answer questions 198-203:

Page 39
198. (Table: Johnson's Income and Expenditures) Use Table: Johnson's Income and
Expenditures. Johnson's income elasticity of demand for steaks is:
A) greater than 1.
B) 1.
C) between 0 and 1.
D) 0.

199. (Table: Johnson's Income and Expenditures) Use Table: Johnson's Income and
Expenditures. Johnson's income elasticity of demand for magazines is:
A) negative.
B) 0.
C) between 0 and 1.
D) 1.

200. (Table: Johnson's Income and Expenditures) Use Table: Johnson's Income and
Expenditures. For Johnson, magazines are a(n) _____ good.
A) negative
B) inferior
C) normal
D) neutral

201. (Table: Johnson's Income and Expenditures) Use Table: Johnson's Income and
Expenditures. By the midpoint method, Johnson's income elasticity of demand for
movies is:
A) infinite.
B) 1.
C) 0.
D) –1.

202. (Table: Johnson's Income and Expenditures) Use Table: Johnson's Income and
Expenditures. By the midpoint method, Johnson's income elasticity of demand for
pizzas is:
A) –1.4.
B) approximately –0.7.
C) 0.
D) approximately 0.7.

Page 40
203. (Table: Johnson's Income and Expenditures) Use Table: Johnson's Income and
Expenditures. For Johnson, pizzas are a(n) _____ good.
A) inferior
B) positive
C) neutral
D) normal

204. Suppose the income of canned pinto bean consumers rises. All else equal, we can
conclude that the:
A) income elasticity of demand is positive if beans are a normal good.
B) income elasticity of demand is positive if beans are an inferior good.
C) cross-price elasticity between beans and other goods is positive.
D) cross-price elasticity between beans and other goods is negative.

205. Which good(s) is/are MOST likely to have a vertical supply curve?
A) salt
B) oil
C) insulin
D) paintings by Van Gogh

206. Suppose the price of university sweatshirts increases from $10 to $20 and the quantity
supplied increases from 20 to 30. The price elasticity of supply, using the midpoint
formula, is:
A) 0.66.
B) 1.50.
C) 0.60.
D) 1.66.

207. A perfectly elastic supply curve is:


A) horizontal.
B) downward sloping.
C) upward sloping.
D) vertical.

Page 41
208. Suppose the price of real estate increases by 37.11% in Oakland next year. If the
quantity of new homes supplied does not change, this means that the price elasticity of
_____ will be perfectly _____ in Oakland next year.
A) demand; elastic
B) supply; inelastic
C) demand; inelastic
D) supply; elastic

209. If quantity supplied responds substantially to a relatively small change in price, supply
is:
A) price-elastic.
B) price-inelastic.
C) negatively sloped.
D) insensitive to changes in price.

210. If the price elasticity of supply is greater than 1:


A) supply is price-elastic.
B) supply is price-inelastic.
C) supply is price unit-elastic.
D) the quantity supplied is relatively unresponsive to price changes.

211. If the price elasticity of supply is less than 1, then supply is:
A) price-elastic.
B) price-inelastic.
C) price unit-elastic.
D) very responsive to price changes.

212. The price elasticity of supply is computed as the percentage change in _____ divided by
the percentage change in _____.
A) quantity supplied; quantity demanded
B) quantity supplied; price
C) price; quantity supplied
D) quantity supplied; consumer income

Page 42
213. An attorney supplies 40 hours of work per week when her fee is $100 per hour but
supplies 60 hours of work per week when her fee rises to $120 per hour. Using the
midpoint formula, her elasticity of supply is equal to:
A) 1.
B) 0.8.
C) 2.2.
D) 0.45.

214. A hotel has a fixed capacity of 100 rooms in the short run. Which statement BEST
describes the short-run elasticity of supply for rooms at this hotel?
A) The supply is elastic at quantities above 100 rooms but inelastic at quantities below
100 rooms.
B) The elasticity of supply is equal to 1 in the short run but infinitely elastic in the
long run.
C) The elasticity of supply is zero in the short run because the short-run supply curve
is vertical.
D) The supply is infinitely elastic in the short run but perfectly inelastic in the long
run.

215. Paolo owns a pizza shop. The price of pizza recently increased from $3 to $5 a slice.
Paolo responded by increasing the quantity of slices he supplied from 100 to 150 slices
per day. By the midpoint method, Paolo's price elasticity of supply is:
A) 1.25.
B) 0.8.
C) 0.75.
D) 2.5.

Use the following to answer questions 216-217:

Page 43
216. (Figure: Supply Curves) Use Figure: Supply Curves. Which graph shows a perfectly
inelastic supply curve?
A) A
B) B
C) C
D) D

217. (Figure: Supply Curves) Use Figure: Supply Curves. Which graph shows a perfectly
elastic supply curve?
A) A
B) B
C) C
D) D

218. The price elasticity of supply for a good is 3 if a _____ in price leads to a 3% decrease
in the quantity supplied.
A) 1% increase
B) 1% decrease
C) 9% decrease
D) 9% increase

219. The price elasticity of supply measures:


A) the response of a supply shift to changes in technology.
B) how much supply changes when the prices of inputs change.
C) the responsiveness of the quantity supplied to changes in the price of the good.
D) the response of a supply shift to changes in technology and to changes in prices.

220. If the quantity supplied responds substantially to a relatively small change in price,
supply is:
A) price-elastic.
B) price-inelastic.
C) negatively sloped.
D) insensitive to changes in price.

221. If the price elasticity of supply is:


A) greater than 1, then the supply is price-elastic.
B) greater than 1, then the supply is price-inelastic.
C) zero, then the supply is price unit-elastic.
D) greater than 1, then the quantity supplied is relatively unresponsive to price
changes.

Page 44
222. If the price elasticity of supply is:
A) less than 1, then the supply is price-elastic.
B) less than 1, then the supply is price-inelastic.
C) zero, then price is unit-elastic.
D) less than 1, then the supply is very responsive to price changes.

223. Which statement is likely to be associated with inelastic supply?


A) The time period under consideration is very long.
B) The inputs necessary for production cannot readily be increased.
C) The good is necessary for survival (e.g., a life-saving drug).
D) Consumers are willing to pay any price for the good.

224. The long-run price elasticity of supply of crude oil is _____ the short-run price elasticity
of supply of crude oil.
A) less than
B) greater than
C) equal to
D) not comparable to

225. In the short run, the price elasticity of supply for foods low in carbohydrates is lower
than it will be in the long run because:
A) in the short run, inputs are more available to produce these foods than in the long
run.
B) in the short run, food producers do not have much time to respond to changes in
demand.
C) in the short run, prices tend to stay constant.
D) in the long run, the price elasticity of supply tends to be perfectly inelastic.

226. Which factor is important in determining the price elasticity of supply?


A) the time the producer has to adjust inputs and outputs
B) the number of close substitutes
C) the intensity of the need of consumers
D) the number of alternative uses of the good

Page 45
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Chapter VI.

LAW AND JUSTICE.

Though convicts were unhappily supplied at an increasing rate from


the mother-country, the demand for free labourers throughout Van
Diemen’s Land became more urgent continually. The young men
who settled either as wool-growers, farmers, or labourers, wanted
wives. All above the lowest rank needed servants. The sheep were
too many for the shepherds. There was too little produce in
proportion to the land; and too few dwellings in proportion to the
produce; too much or too little of almost everything, for want of a due
proportion of labour. The same thing is the case at home; only here
the proportions are exactly reversed. It will be very strange if in a
short time we do not rectify the condition of each country by the
exchange which would be equally beneficial to both.
Ireland and Van Diemen’s Land are islands of about the same
size. They are each favoured by nature in an unusual degree, having
all the requisites of fertility, variety and beauty which can fit them to
be the abodes of a thriving and happy population. The arable lands
and pastures of both are excellent. The one has fisheries of salmon,
herring and cod; the other of whales, and seals for export, and of a
large variety of fish for home consumption. Both have fine natural
harbours, ridges of protecting mountains, stores of mineral treasure,
inland lakes, and fresh springs wherever man may incline to fix his
abode. Both have, with all these advantages, their natural hardships
and social troubles.
The natural hardships of each might be almost entirely removed
by a well-conducted reciprocity of assistance. Ireland has a
population of eight million; Van Diemen’s Land of only twenty-five
thousand. In Ireland, multitudes of half-starved wretches pine in
idleness, and many die by the way-side, of that wasting of limb and
heart and life which is the form in which poverty perpetrates murder.
In Van Diemen’s Land, the labourer is liable to be worn out by toil,
and fretted by seeing half his produce rotting on the ground, or
wastefully bestowed on swine; while articles which he has always
considered almost as necessary as food cannot by any means be
procured. With him, abundance is not wealth, and plenty brings not
the happiness for which he looked. If the wide sea did not lie
between, he would beckon to a dozen Irishmen to come and nourish
themselves with his superfluity, while he gathers about him the
comforts which spring out of their industry, and solaces himself with
a due portion of that repose, without a certain share of which the
best ends of life cannot be attained. Why should not a bridge be built
across this wide sea with the capital which is now unproductively
expended on the maintenance of these paupers? Why should not
the charity which cannot in Ireland give subsistence to one without
taking it from another, be employed in a way which gives support to
many, to the benefit of many more? Whatever funds are judiciously
employed on emigration are used as if to bring to a junction with the
over-peopled country a rich region, into which a hungry multitude
may be poured, to the relief of the old, and the great advantage of
the new land. If the wealthy among the inhabitants of the old country
would gladly if they could, call up such a new region, drest in fertility,
from the surrounding sea, why do they delay effecting what is to their
purpose the same thing? Since they cannot move the land to their
poor, why do they not agree to devote what they now give in baneful
charity to removing their poor to the new land? Till such a general
agreement is arrived at, why do not individuals thus apply their
charity, knowing that thus they not only relieve for a time, but
establish for life;—that they not only assist the immediate objects of
their bounty, but provide for their descendants of many generations?
The rich should choose for their almoners the agents of emigration.
Those who have little to give should unite their resources to send
abroad a few of the young labourers of both sexes who are eager to
go. Those who have no money to give, should bestow their services
in spreading the knowledge of the facts how poor-laws aggravate,
and emigration alleviates, if it does not remove, pauperism.
If this had been done long ago, the places whither we now
transport our criminals might at present have been as remarkable for
the good moral condition of their inhabitants as they actually are for
the reverse. If it were now to be done effectually, it is yet possible
that Botany Bay may in time outgrow the odium attached to its name,
and become the chosen resort of the upright and industrious.
Indigence causes crime; and by the prevention of indigence and its
consequent crime, we may become better able than we now fancy
ourselves to dispense with the institution of penal settlements;—
whose results are as disgraceful to British wisdom as that of a legal
pauper provision.
When Jerry and Bob were landed at Launceston, they were as
unable as those who sent them were disinclined, to reflect on the
difference between their being sent there, innocent, to provide an
honest livelihood for themselves, and being deposited as a curse
upon this new region,—both guilty and one hardened, proscribed by
the old country and dreaded by the new, and prepared to baffle all
the professed objects of their punishment. The guilt of these lads
was distinctly referrible to indigence. Their parents could give them
little wherewith to provide for their bodies, and nothing of that care
and instruction which were peculiarly needful to them in their
circumstances of temptation. Being thus made outcasts, they acted
as outcasts; from which time it became a struggle between
themselves and society which could inflict the most misery upon the
other. They put society in fear, violated its rights, mocked its
institutions, and helped to corrupt its yet innocent members. Society
inflicted on them disgrace, bondage, and banishment; and from all
this misery no good resulted, however much was proposed.
The judge who pronounced sentence on Jerry and Bob told them
that it was necessary to the security of society that they should be
prevented from inflicting any further injury by their evil deeds.—
There are two ways by which such prevention may be accomplished;
one by the death, the other by the reformation, of the offender. Death
was too severe a punishment for the offence of these lads; the judge
must therefore have contemplated their reformation, or have thought
only of England when he spoke of society. Did the law gain its
object?
“I say, Bob,” said Jerry one evening, when they had got the leave it
is so easy to obtain to go out of bounds, and work for themselves
over-hours,—“I say, do you remember what that fellow in Newgate
read us about that cursed gaol where the people are mewed up as
close as if they were in a school, and closer?”
“What that where they are shut in by themselves all night, and
hard worked all day, and nobody may speak but the parson, and he
praying and preaching night and morning, till a fellow’s spirit is
downright broken? Remember it! aye; and glad enough I have been
many a time that we are not there. I’d rather be hanged twice over.”
“Hanged! Yes: there’s not much in hanging. I have seen it several
times, and thought to myself, ‘if that’s all, I should not mind it.’ But we
are the best off, after all. I was horribly afraid, when old wiggy began
to whimper, that it was to be the hulks, or a long prison, instead of
going abroad; for one never knows what they mean when they say
‘transportation.’ You would not have looked so downcast as you did if
you had known what was before you.“
“Not I. I never thought to be made of so much consequence. ’Tis
good fun to see them quarrel which shall have us, and to get them to
bid rum and brandy against each other to seduce us away. We that
could not get dry bread at home,—how easy it is for us to fill our
stomachs with the choice of the land, and get drunk with our masters
at the end of the day,—our masters being luckily of our own sort!”
“Yours, that is, Bob; not mine. But I don’t know but I like mine as
well. He gives me plenty of spare hours, on condition of my bringing
back what I earn. You should have seen what a fright he looked in
when somebody said the folks were growing moral at home, and no
more convicts were to be sent out.”
“He was as sorry as some honester folks would be glad, Jerry. But
as for dividing your earnings with your master,—they are a queer
sort of earnings, I have a notion.”
“Easily got enough. ’Tis only just prowling on the downs in a dark
night to meet a stray sheep; or making a venture into the fold. Then,
if one gets so far as into the bush, there are other ways that you
know nothing of yet, Bob.”
“I never can make out how you get seal oil from the woods; being
as we are thirty miles from the sea.”
Jerry laughed, and offered to introduce his brother one day to
somebody in the bush he little dreamed of.
“Do you mean, Frank, poor fellow, or Ellen? They would not go so
far to meet you.”
“Do you think I would ask them? It will be time enough for me to
notice Frank when I have a house of my own to ask him into. I shall
be the master of such as he before his time is out.”
“You need not carry yourself so high, Jerry. You are in a worse
bondage than he just now.”
“Curse them that put me into it, and let them see if I bear it long!
However, hold your tongue about it now. There is the moon through
the trees, and the free turf under our feet. What a pity there is
nobody with a heavy purse likely to pass while we are resting in the
shadow under this clump! ’Tis such dull work when there is nothing
better to be had than sheep and poultry, and so many of them that
they are scarcely worth the taking!”
“I like roving for the sake of roving,” said Bob. “I have plenty of
mutton without stealing it.”
“I like robbing for the sake of robbing,” replied his brother; “and the
mutton is only the price of my frolic. But there is something I like
better. Let us be off, and I will show you, (if you’ll swear not to blab,)
how you may get such sport as you little think for. Learn to handle a
gun, and to cross a farm-yard like a cat, and to tap at a back-door
like a mouse within a wainscot, and you may laugh at the judge and
the law, and all the dogs they have set to worry us.”
“Why no, thank’ee,” replied Bob. “I am trying after a character, you
know, so I shall stay where I am. I’ll light my pipe; and I’ve got rum
enough to last till morning both for myself and somebody I rather
expect to meet me.”
“Take care she be not too deep for you, Bob. If ever you want a
wife with no more sense than a monkey, and not half as many tricks,
ask me, and I will show you how to get one.”
So much for the reformation of the offender. The other kind of
security on which the judge expatiated was that afforded by the
criminal being made a warning.
A waggon load of new convict-labourers arrived at the Dairy Plains
one day, when the accustomed gang was at work on the road which
was not yet completed. The masters who happened to be present
were too much taken up with observing the new-comers to pay any
attention to the looks of their labourers. They did not see the winks,
and the side-long smiles, they did not hear the snapping of fingers
behind their backs; they had no suspicion that some in the waggon
were old acquaintances of those on the road. On the first opportunity
after the fresh men were left with the others, and only one or two
over-lookers near, there was a prodigious hand-shaking and
congratulation, and questioning. “How did you get over?” “How did
you manage to get sent here?” “How do you like transportation?”
“You’ll soon learn to know your own luck.” “This is a fine country, is it
not?” &c. &c.
“I was so cursedly dull after you all went away,” observed one of
the new-comers, “there was nothing to stay for: but I very near got
sent to Sidney.”
“Well; you could soon have got away, either home or here. But
how do you find yourself off?”
“With a bed to myself and a blanket, and rare good living to what I
had when I was an honest man. The thing I don’t like is the work; but
they say we are to have plenty of spirits.”
“To be sure; and as to the work,—what do the poor wretches at
home do but work as hard as you, and for less than you can get in
spare hours. But where’s Sam? Why did not he come too?”
“He got baulked, as he deserved for being a fool. What did he do
but send his sister to the justice to know how much he must steal to
be transported, and no more? The justice set the parson at him; and
between the two, they have cowed him, poor fellow, and he will
never better his condition.”
“Perhaps he is afraid. Perhaps he believes what the judge said
about our being a warning. And yet he tipped me the wink when that
was said, and when some of the pretty ones in the gallery began to
cry.”
“He knows better than you think. If you were as moped as a linnet
in a cage, he would know nothing of it; because you are too far off
for him to see what became of you, in that case; but, being as you
are, a merry, rollicking set, he would like to be among you; and that
sort of news travels fast.”
Another of the party did not like his lot so well. He said nothing of
the disgrace, though he felt it; but he complained of the toil, of the
tyranny of the masters, of the spite and bickerings of his
companions.
“If you don’t like your company, change it,” replied one to whom he
had opened his mind. “Such a good hand as you are at a burglary, I
don’t wonder that you had rather steal enough in one night to live
upon for a month, than work as commoner hands do. You had better
go back. Jerry will tell you how. Nothing is easier.”
“Well; but there is my little woman yonder, that they were so kind
as to send over at the same time; how is she to get back? She can’t
turn sailor, and get her passage home in that way.”
“Trust her for making terms with some gull of a sailor,” replied the
other, laughing. “It is only following an old trade for a particular
reason; and you’ll give her leave till you touch land again. But let me
hear before you go; there are some acquaintance of mine in London
that will be glad to know you; and you may chance to help one
another; though, to be sure, you take a higher line.”
“Are you thinking of sending over the fee they raised for your
defence?”
“I did intend it, as a point of honour; but they assure me they made
a good bargain of it as it was. They could have paid the fee three
times over out of the plate-chest they stole for it. So I don’t know that
I need trouble myself.”
“So while Counsellor H—— was preaching about your being tried
that people might be safe, there was another robbery going on to
pay him his fees. That’s rare! You should go back, (since the way is
so easy,) and pick Counsellor H—’s pocket. That will mend the joke.”
So much for the security to society from the exhibition of this kind
of warning.
Chapter VII.

CHRISTMAS AMUSEMENTS.

Ellen’s wedding day drew near. Frank and Harry Moore had toiled
together at spare hours to erect and fit up a convenient dwelling; and
there was no fear whatever but that she and her husband would be
amply supplied with all the necessaries and many of the comforts of
life. Her father began to smile upon her, though he muttered
complaints of there being so many changes always going on that
none of them ever knew when they were settled. Her step-mother,
though still hinting that the girl knew what she was about when she
was in such a hurry to come away from a poor parish, seemed very
well satisfied to have matters so arranged, and rather proud than
otherwise of belonging to Ellen. The farmer and his wife whom Ellen
served sighed when they found she was going to leave them, and
observed that it was always the way, as soon as they got suited with
a dairy maid; but as she agreed to go on taking care of their cows till
they could obtain another damsel in her place from Hobart Town,
they treated her very graciously. The only serious drawback to her
comfort was that Harry’s fellow-labourers would go on courting her,
though they knew she was engaged, and that this caused Harry to
be more jealous than she felt there was any occasion for, or than she
could easily excuse. She had no other fault to find with Harry; but
she was more than once on the point of breaking off the match on
this account, and if it had not been for Frank’s interposition, and his
assurances that such feelings were very natural in Harry, she would
have thrown away her own happiness for want of being sufficiently
aware of the danger of such a position as hers to a girl of less
principle than herself.—A circumstance happened, a few days before
her marriage, which everybody else thought very disastrous; but
which she could not think so, since it established a perfect
understanding between Harry and herself.
On the morning of the 21st of December,—the height of summer in
Van Diemen’s Land,—Frank appeared, breathless, in the farm-yard
whither Ellen was just going to milk her cows; Castle at the same
moment was seen at some distance, hastening from the downs
where he ought to have been tending his sheep at this hour; Harry
Moore next leaped the gate and wiped his brows, seeming too much
agitated to speak; the farmer pulled his hat over his eyes, in
anticipation of the news that was coming, and the women crowded
together in terror.—Ellen was the first to ask what was the matter.
“Have your men decamped, farmer?” inquired Frank.
“Yes, almost to a man. Have Stapleton’s?”
“Two out of four; and every settler in the neighbourhood misses
more or less this morning.”
“Now the devil and his imps will be on us in the shape of a gang of
bush-rangers,” muttered the farmer.
“Not on us, farmer. They will more likely go to some distant part
where their faces are strange.”
“If they do, they will send strange faces here, which comes to the
same thing; for one bush-ranger’s face is as devilish as another. One
of us must be off in search of a guard, and our shepherds, and
indeed all of us, must carry arms.”
Ellen turned pale at the mention of arms. Harry drew to her side,
and told her in a tone of forced calmness that three of her lovers
were gone.
“Gone!” cried Ellen joyfully. “Gone for good?”
“Gone for ever as lovers of yours.”
“Thank God!” said she. “Better watch night and day with arms in
our hands than have your head full of fancies, Harry. You will never
believe again that I can like such people: and you shall teach me to
fire a gun, so as to defend the house while you are away; and I shall
not be afraid of anything when you are at home.”
Harry was so alert and happy from this moment that one would
have thought there had been a certainty that no bush-rangers would
ever come again, instead of a threatening that those who had till now
been servants would soon reappear as enemies.
Whatever arms could be found up were put into the hands of the
shepherds, as they were most in danger from violence for the sake
of their flocks. They were desired to keep in sight of one another so
far as that each should be able to make a certain signal agreed on,
in case of his having reason to suppose that there were enemies at
hand. Frank departed immediately for Launceston, for powder and
ball, and a further supply of labourers to fill the places of those who
had eloped. Another messenger was sent to the seat of government
to give information of what had happened. During the absence of her
brother, Ellen heard enough of the evils inflicted by runaway convicts
to alarm a stouter heart than any young girl devotedly attached to
her lover ever had; and to add to her uneasiness, her father once
more became gloomy, and poor little Susan clung to her side
wherever she went. Harry left his work twenty times a day to tell her
that all was quiet, and bid her not be alarmed. During the day, she
followed his advice pretty well; but in the evenings, so many tales of
horror went round that, though she did not believe the half of them,
her confidence was shaken; and she went to bed shuddering to think
of what might have happened before morning.
The bush-rangers seemed to be less dreaded by the settlers than
the natives. The bush-rangers came down in a troop, carried off what
they wanted, occasionally shooting a man or two during the process,
and then went completely away. The warfare of the natives was
much more horrible,—their movements being stealthy, their revenge
insatiable, their cruelty revolting. They would hover about for days or
weeks before committing an outrage, planning the most wicked way
of proceeding, and seizing the most defenceless moment for
pouncing on their victims. Castle asked aloud, what Ellen inquired in
her heart, why all this was not told them before they came, and what
there was in wealth which could compensate for such alarms as they
were now suffering under? Frank satisfied her, in some degree,
when he returned on the 24th,—the day before her wedding. He told
her that though the first settlers had suffered dreadfully from the
murders and plunder of the hostile natives and runaway convicts,
this was not a sufficient reason to deter other settlers from following,
since, owing to the vigorous measures of the Australian government,
such outrages had been repressed and nearly put an end to. He
pointed out to her that the horrible tales she had been told related to
former times, and assured her that, except in some districts near the
wilder parts of the island, the face of a savage had not been seen for
years.—Ellen pointed to the mountain wastes on which their
settlement bordered, and Frank acknowledged that the Dairy Plains
lay as open to an attack as most newly-settled districts; but he had
been assured at Launceston that there was no need to terrify
themselves with apprehensions as long as they were armed and
properly careful in their movements; since the sound of a musket
would disperse a whole troop of savages, and they attacked no
place that was not left absolutely defenceless. He had distinctly
ascertained what he had before conjectured,—that it was not the
practice of runaway convicts to plunder settlements where their
faces were known, and that the only danger therefore arose from the
probability that they might injure the savages, who might come down
to wreak their revenge upon the innocent settlers.
“If this is all,” sighed Ellen, “there is nothing——”
“To prevent your being married to-morrow, Ellen. So I have been
telling Harry.”
“There was no occasion, thank you. I never meant to put it off. The
more danger, the more reason for our being together. Besides, it will
help to take father’s mind off from his discontent. He has been
wishing himself back in Kent every hour since you went.”
“Indeed! Well now, I think that such an occasional fright as this is
little to the hardship of living as we did at A——, to say nothing of the
certainty of there soon being an end to it. The only two evils our
settlers suffer from will grow less every year; the scarcity of labour,
and danger of theft. To make up for these, we have the finest climate
in the world, abundance of all that we at present want, and the
prospect of seeing our children, and their children again, well
provided for.—But you must be in a hurry now, dear, considering
what has to be done to-morrow. So go, and cheer up, and trouble
your head no more about black or white thieves.”
Ellen had, however, little more than usual to do this day, as hers
was not the kind of wedding to require preparation. The travelling
chaplain who was to come and perform the Christmas service, was
to marry the young people, and thus only was the day to be marked
as different from any other. The settlers, no doubt, thought much of
their friends in England, and of the festivities which are there enjoyed
by all but those whose poverty deprives them of the means: but the
seasons are so entirely reversed in Van Diemen’s Land,—it is so
impossible amidst the brilliant verdure, the heat and long days of the
Christmas season there, to adopt the festivities carried on at home
beside the hearth and over the punch-bowl, that Christmas-day was
allowed to pass quietly, and the grand holidays of the year were
wisely made on the anniversaries of their settlement in their present
abodes,—of their entrance on a life of prosperity.
No fairer morning ever dawned than that on which Ellen arose
very early, and stole out to find that refreshment in the open air
which she was not disposed to seek in more sleep. She had rested
well for a few hours, but the first rays of the sun finding their way into
her chamber, (which was more like a clean loft than an English
bedroom), roused her to thoughts that prevented her sleeping again.
It was too soon to be looking after her cows; so she took her knitting,
and sat on the bench outside the house, whence she could look over
a vast tract of country, and where she was pretty sure of an hour’s
quiet. She had some thoughts to spare for her old Kentish
neighbours; and began to fancy how her grandmother would be
getting up three hours after, when it would be scarcely dawning, to
make the room tidy, and light the fire to boil the kettle; and how the
old couple would put on their best, and draw over the hearth with
their Christmas breakfast. Then she thought of the many boys and
girls she knew who would be going to church, with red noses, and
shivering in their scanty clothing. Then she sighed when she
remembered that she might never more hear psalms sung in a
church; and again she smiled while fancying Mr. Fellowes’s great
dinner to half the parish,—a dinner of roast beef and ale and plum
puddings, and Mr. Jackson there to say grace, and the clerk to sing a
Christmas carol, and every old man giving a toast by turns, and
some one perhaps to propose the healths of their friends far away.
She blushed, all alone as she was, when she wondered what they
would say if they knew she was to be married so soon, especially if
they could see Harry. It was strange, while her mind was thus full of
pictures of a frosty day, of a smoking table, of a roaring fire, lamps,
and a steaming punch-bowl, to look up and observe what was before
her eyes. The scene was not even like a midsummer morning in
Kent. It was not dotted with villages: there were no hop-grounds, and
all the apples grown within five miles would hardly have made an
orchard. There were no spires among the trees; nor did the morning
mists rise from the dells or hover over the meadows. All was clear
and dry and verdant under the deep blue sky. No haze hung over the
running streams that found their way among the grassy hillocks.
Neither oak nor beech grew on the hill side, nor pines on the ridges
of the mountains behind; but trees to whose strange foliage her eye
was yet unaccustomed reared their lofty stems where it did not
appear that the hand of man was likely to have planted them; and
myrtles and geraniums grew up roof-high, like the finest monthly
roses in England. Instead of the little white butterflies flitting over the
daisied turf, there were splendid ones alighting here and there in the
neighbouring garden, larger and gayer than the finest of the flowers
they fed upon. Instead of the lark rising from her dewy nest into the
pink morning cloud, there were green and crimson parrots glancing
among the lofty evergreens. Instead of flickering swarms of midges,
flies shone like emeralds in the sun. Instead of a field-mouse
venturing out of its hole, or frogs leaping across the path, speckled
and gilded snakes (of which Ellen had learned not to be afraid)
wriggled out into the sunshine, and finding that the world was not all
asleep, made haste to hide themselves again.
“If I could fancy any part of this to be England,” thought Ellen, “it
would be yonder spot behind the range of woodland, where the
smoke is rising. If that were but grandfather’s cottage, how I would
run and bring them here before any body else was up. They will be
so sorry not to have seen me married, and not to know Harry! But I
cannot make out that smoke. I did not know that anybody lived there,
and it looks more than enough to come from a single chimney.
Perhaps the man that found the brick clay, and talked of having a
kiln, may have settled there. I will ask Harry. I wonder what o’clock it
is now! He said he should finish his morning’s work first, that he
might stay when he did come. How odd it seems that there are so
few people to do things here, that a man can scarcely be spared
from his work on his wedding day! They must be all over-sleeping
themselves, I think. I’ll just get the milk-pails, and that may wake
them; and if the cows are milked a little earlier than usual, it will not
signify. I only get fidgetty, sitting here, and fancying noises; from
missing the singing-birds, I dare say, that are busy among the
boughs on such a morning as this in England. It was an odd squeak
and whistle that I heard just now; perhaps a quail or a parroquet, or
some other bird that I don’t know the note of yet. Or it might be one
of those noisy black swans on the lake yonder. I will not stay any
longer to be startled. That was only a butterfly that flew dazzling
before my eyes; and these flies do not sting, so I need not mind their
buzzing. There! I had rather hear that lowing that I have been used
to from a child than any music in the world. I should be sorry indeed
to give up these cows, for all I am going to have one of my own.”
Ellen purposely made some noise in getting her pails, that she
might wake somebody and find out how time went. She could not
account for the sun being so low in the sky till she heard the farmer
growl that he wished people would be quiet till it was time to get up;
which it would not be for two hours yet.
After pausing before the door to watch the distant smoke, which
had much increased, Ellen repaired to the cow-yard, immediately
behind the dwelling. She stumbled on something in the litter which
she mistook for a little black pig, till its cry made her think it was
something much less agreeable to meet with. Stooping down, she
saw that it was certainly a black baby; ugly and lean and dirty; but
certainly a baby. She did not scream; she had the presence of mind
not to touch the little thing, remembering that, for aught she knew,
the parents might be lurking among the sheds, and ready to spring
upon her if she should attempt to carry away the infant, which had
probably been dropped in the hurry of getting out of her way.
Trembling and dreading to look behind her, she stepped back into
the house, and now roused the farmer in good earnest. In a few
minutes, the whole household was in the cow-yard; the men not
choosing to separate, and the women being afraid to leave their
protectors. The child was still there, and nothing was discovered in
the general search of the premises which now took place. When the
farmer saw the smoke at a distance, he ascribed it at once to a party
of natives having set the grass on fire in cooking their kangaroo
repast. He thought it probable that two or three spies might be at
hand, and the rest of the party ready for a summons to fall on the
farm as soon as it should, by any accident, be left undefended. He
would not have the child brought into the house, but fed it himself
with milk, and laid it on some straw near where it was found, in a
conspicuous situation. Beside it he placed some brandy, and a
portion of food for the parents, if they should choose to come for it.
“There is no knowing,” said he, “but they may be looking on; and
one may as well give them the chance of feeling kindly, and making
peace with us.” And he silenced one of his men who began to
expatiate on the impossibility of obtaining any but a false peace with
these treacherous savages.
Nothing could satisfy Harry but standing over his betrothed with a
musket while she was milking. As for her, every rustle among the
leaves, every movement of the cow before her, made her inwardly
start; though she managed admirably to keep her terrors to herself.
The arrival of the chaplain happened fortunately for collecting the
neighbouring settlers; and, by the farmer’s desire, nothing was said
of what had happened till the services he came to perform were
ended. Harry and Ellen were married, amidst some grave looks from
the family of which they had till now made a part, and the smiles of
all the guests. Ellen’s disappointed lovers,—the only people who
could possibly disapprove of the ceremony,—were absent; and she
tried not to think about what they might be doing or planning.
The barking of the dogs next drew the party to the door, and they
saw what was a strange sight to many of the new-comers. A flock of
emus, or native ostriches, was speeding over the plain, almost within
shot.
“What are they?” inquired one.
“’Tis many a month since we have seen an emu,” observed
another. “I thought we had frightened away all that were left in these
parts.”
“What are you all about,” cried a third. “Out with the dogs and after
them! Make chase before it is too late!”
“A decoy! a decoy!” exclaimed the farmer. “Now I am certain that
mine is a marked place. These savages have driven down the emus
before them, to tempt us men out to hunt, and they are crouching
near to fall on while we are away.”
He was as bold, however, as he was discerning. He left three or
four men to guard the women and stock at home, and set off, as if on
a sudden impulse, to hunt emus with the rest of his company,
determining to describe a circuit of some miles, (including the spot
whence the smoke arose) and to leave no lurking place unsearched.
Frank went with him. Castle insisted on following his usual
occupation on the downs, declaring himself safe enough, with
companions within call, and on an open place where no one could
come within half a mile without being seen. This was protection
enough against an enemy who carried no other weapons than
hatchets and pointed sticks, hardly worthy of the name of spears.—
Harry remained, of course, with his bride.
The day wore away tediously while the home guard now patrolled
the premises, now indolently began to work at any little thing that
might happen to want doing in the farm-yard, and then came to sit on
the bench before the door, complaining of the heat. The women,
meanwhile, peeped from the door, or came out to chat, or listened
for the cry of the dogs, that they might learn in which direction the
hunting party was turning.
“Ellen,” said her husband, “I do wonder you can look so busy on
our wedding day.”
“O, I am not really busy! It is only to drive away thought when you
are out of sight.”
“Well then, come with me across the road,—just to our own
cottage, and see how pretty it was made for us to have dined in to-
day, if all this had not happened. Frank was there after you left it last
night; and there is more in it than you expect to see.—Now, don’t
look so afraid. It is no further than yonder saw-pit; and I tell you there
is not a hole that a snake can creep into that we have not searched
within this hour.—I do not believe there is a savage within twenty
miles.—O, the baby!—Aye. I suppose it dropped from the clouds, or
one of the dogs may have picked it up in the bush. ’Tis not for myself
that I care for all this disturbance: ’tis because they have spoiled
your wedding day so that you will never bear to look back to it.”
Ellen wished they were but rid of their black foes for this time, and
then she should care little what her wedding day had been. They
said that one sight of a savage in a life-time was as much as most
settlers had.—She must step in passing to see what ailed the poor
infant, which was squalling in much the same style as if it had had a
white skin;—a squall against which Ellen could not shut her heart
any more than her ears.
“I must take it and quiet it,” said she. “I can put it down again as
we come back in ten minutes.”
So lulling and rocking the little woolly-headed savage in her arms,
she proceeded to her own cottage, to admire whatever had been
suggested by her husband, and added by her neat-handed brother.
“What bird makes that odd noise?” inquired Ellen presently. “A
magpie, or a parrot, or what? I heard it early this morning, and never
before. A squeak and then a sort of whistle. Hark!”
“’Tis no bird,” said Harry in a hoarse whisper. “Shut and bar the
door after me!”
And he darted out of the cottage. Instead of shutting the door,
Ellen flew to the window to watch what became of Harry. He was
shouting and in full pursuit of something which leaped like a
kangaroo through the high grass. He fired, and, as she judged by his
cry of triumph, reached his mark. A rustle outside the door at this
moment caught her excited ear; and on turning, she saw, distinct in
the sunshine on the door-sill, the shadow of a human figure, as of
some one lying in wait outside. Faint with the pang of terror, she
sunk down on a chair in the middle of the room, with the baby still in
her arms, and gazed at the open doorway with eyes that might seem
starting from their sockets. Immediately the black form she dreaded
to see began to appear. A crouching, grovelling savage, lean and
coarse as an ape, showing his teeth among his painted beard, and
fixing his snakelike eyes upon hers, came creeping on his knees and
one hand, the other holding a glittering hatchet. Ellen made neither
movement nor sound. If it had been a wild beast, she might have
snatched up a loaded musket which was behind her, and have
attempted to defend herself; but this was a man,—among all his
deformities, still a man; and she was kept motionless by a more
enervating horror than she would once have believed any human
being could inspire her with. It was well she left the weapon alone. It
was better handled by another. Harry, returning with the musket he
had just discharged, caught a full view of the creature grovelling at
his door, and had the misery of feeling himself utterly unable to
defend his wife. In a moment, he bethought himself of the back
window, and of the loaded musket standing beside it. It proved to be
within reach; but his wife was sitting almost in a straight line between
him and the savage. No matter! he must fire, for her last moment
was come if he did not. In a fit of desperation he took aim as the
creature was preparing for a spring. The ball whistled past Ellen’s
ear, and lodged in the head of the foe.
They were indeed safe, though it was long before they could
believe themselves so, or Ellen could take courage to cross to the
farm to tell what had happened. As there were no more traces of
lurkers in the neighbourhood, it was supposed that the one shot in
the grass was the mother, the one in the door-way, the father of the
infant which no one now knew what to do with. It might be dangerous
to keep it, whether it flourished or died under the care of the settlers;
and there seemed to be no place where it could be deposited with
the hope of its being found by its own tribe. When Frank and his
companions returned from the hunt, they threw light on this and
other curious matters, and brought comfortable tidings to the inmates
of the farm. The Castles, indeed, and they alone, found as much
matter of concern as of comfort in what Frank had to tell.
In following the emu hunt, the farmer and his party had skirted a
tract of woodland, called the bush, within which they perceived
traces of persons having lately passed. On searching further, they
came upon a scene rather different from what they had expected,
and not the most agreeable in the world, though it fully accounted for
the visit of the natives.—Under a large mimosa, which waved its long
branches of yellow flowers over the turf, and made a flickering
shade, lay Jerry, enjoying the perfection of convict luxury; that is,
smoking his pipe, drinking rum, and doing what he pleased, with a
black wife, who, having skinned the kangaroo and lighted the fire,
squatted down on the turf, waiting for further orders. If it had not
been for the child she carried in a hood of hide on her shoulders, she
would have been taken for a tame monkey, so little was there human
in her appearance and gestures; but the tiny face that peeped over
her shoulder had that in it which bespoke humanity, however soon
the dawning rationality might be destined to be extinguished.—On
seeing the hunting-party, Jerry sprang to his feet, seized his arms,
and whistled shrill and long; whereupon so many hootings and
whistlings were heard through the wood, so many ferocious faces
appeared from among the brakes on every hand that it became
prudent to explain that no war was intended by the hunting-party.
Frank and Jerry were the spokesmen; and the result of their
conference was the communication of news of much importance to
both parties. Jerry learned that the settlements below were so well
guarded and reinforced that any attempt at plunder must fail; and he
assured Frank that he was about to depart at once with his band to
one of the islands in Bass’s Strait, to live among, or reign over the
natives, as many a convict had done before him. He owned that his
black wife was stolen, and that her husband having been knocked on
the head in the scuffle, the rest of the savage party had gone down
to wreak their revenge on the first whites they could meet with. He
was really sorry, he declared, to hear how Ellen’s wedding-day had
been disturbed; and solemnly promised to draw off the foe to a
distant quarter, and watch that they did not again molest the Dairy
Plains. Frank could trust to these promises, as poor Jerry, amidst all
his iniquities, retained a rude sense of honour, and a lingering
attachment to his family,—especially a pride in his sister Ellen.—
Frank learned with great satisfaction that Bob’s disappearance from
the neighbourhood was not owing to his having run away. He had
refused to do so, his ambition being to become a great man in the
settlement, provided he could accomplish his object without too
much trouble and self-denial. He had made a merit of remaining at
his work when his comrades eloped, and had, in consequence, got
promoted to a better kind of employment, by which he had it in his
power to make a good deal of money.
“And now, Ellen,” said Frank, on concluding the story of his
morning’s adventures, “I must go and bring you the wedding present
poor Jerry left behind for you.” And he explained that a sun-dial was
hidden in a secure place, whence it should be brought and put up
immediately.
“Is it stolen, do you think?” inquired Ellen timidly. “Indeed, I had
rather not have it.”
“It is not stolen. A watch-maker, a clever man enough, came over
in the same ship with the lads, and Jerry paid him for making this dial
for you, knowing you had no watch. He could easily have sent you
money, he said, but thought you would like this better, since there is
little that can be bought in these parts that you have not without
money.”
“I don’t know how it is,” observed Ellen; “but though it is very
shocking that Jerry has got among these people, and into such a
brutal way of life, I feel less afraid of them now that he is there. If it
were not for this, I should feel that such a fright as we have had will
set against a great deal of the good we have fallen in with here.”
“It always happens, Ellen, all through life, and all over the world,
that there is something to set against other things; and never more
so than when people leave their own country. If a man quits England
through intolerable poverty, he must not expect to find everything to
his mind, and abundance besides. If he goes to Canada, he may
gain what he emigrates for,—food for himself and property to leave
to his children; but he must put up with tremendous toil and hardship
till he can bring his land into order, and with long, dreary winters,
such as he had no notion of before. If he goes to the Cape, he finds
a better climate and less toil; but from the manner of letting land
there, he is out of the way of society and neighbourhood, and cannot
save so as to make his children richer than himself. If he comes
here, he finds the finest climate in the world, and an easy way of
settling; but then there is the plague of having convicts always about
him, and the occasional peril of being robbed;—and in some few of
the wilder parts of the island, of an individual here and there being
murdered. But this last danger is growing less every year, and
cannot exist long.—Now, since there is evil everywhere, the question
is what is the least? I, for one, think them all less than living in
England in hopeless poverty, or even than getting a toilsome
subsistence there with the sight of hopeless poverty ever before
one’s eyes, and the groans or vicious mirth of pauperism echoing
through the alleys of all the cities of England. I, for one, feel it well
worth anything troublesome we have met with, or can meet with

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