#1
2. If the price elasticity of demand for a good is greater than 1, it is considered:
Inelastic
Elastic
Unitary elastic
Perfectly elastic
#2
10. The concept of elasticity is primarily concerned with the:
Quantity demanded
Price level
Slope of the demand curve
Proportionate response of quantity demanded to a change in price
#3
15. If the price of a good increases by 10% and the quantity demanded decreases by 5%, the price elasticity of demand is:
#4
1. What is price elasticity of demand?
A measure of how sensitive quantity demanded is to a change in price
The total quantity demanded at a specific price
The percentage change in quantity demanded divided by the percentage change in income
The ratio of quantity demanded to quantity supplied
#5
3. Which of the following factors affects the price elasticity of demand?
Availability of substitutes
Total revenue
Advertising budget
Number of producers in the market
#6
6. The midpoint formula for calculating the price elasticity of demand is useful because it:
Considers only initial and final values
Eliminates the need for percentage changes
Gives a more accurate measure of elasticity
Is easier to calculate
#7
8. In the case of inelastic demand, a price increase will result in:
A small decrease in total revenue
A large decrease in total revenue
No change in total revenue
An increase in total revenue
#8
11. If the demand for a good is inelastic, a decrease in price will result in:
A small decrease in total revenue
A large decrease in total revenue
No change in total revenue
An increase in total revenue
#9
4. Cross-price elasticity measures the responsiveness of the quantity demanded of one good to a change in the price of:
Its own good
A complementary good
An inferior good
A substitute good
#10
5. If a good has perfectly inelastic demand, the price elasticity of demand is equal to:
0
1
Greater than 1
Undefined
#11
7. If the demand for a good is perfectly elastic, the price elasticity of demand is equal to:
#12
9. If the cross-price elasticity of two goods is negative, they are likely:
Complementary goods
Substitute goods
Normal goods
Inferior goods
#13
12. The concept of perfectly inelastic demand implies that consumers:
Are willing to pay any price for the good
Will only buy a fixed quantity regardless of the price
Are not sensitive to changes in price
Will buy more as the price increases