4.3 Economics- Elasticity of Demand

Front

Demand elasticity is the extent to which a change in price causes a change in the quantity demanded.

Back

True

Front

Demand is elastic when a given change in price causes a relatively smaller change in quantity demanded.

Back

False

Front

Demand is unit elastic when a given change in price causes a proportional change in quantity demanded.

Back

True

Front

To estimate elasticity, add the direction of the price change to the direction of the change in total revenue or total expenditures.

Back

False

Front

The only determinate of elasticity is the answer to this question: Can the purchase be delayed?

Back

False

Front

Prices for common vegetables tend to be elastic. Why?

Back

because other vegetables are available

Front

Which term refers to a changing price that causes a proportional change in revenue?

Back

unit elastic

Front

An economist performs a total expenditures test and finds that a change in price and a change in revenue move in opposite directions. What does this indicate?

Back

demand is elastic

Front

For which product is demand likely to be the most elastic? a product with no substitutes, a product with inadequate substitutes, a product with many adequate substitutes, it is impossible to tell

Back

a product with many adequate substitutes

Front

To determine elasticity, which question would an economist ask? Options: Can the consumer afford the purchase?, Is the product highly valued by the consumer?, What portion of the consumer's income is required for the purchase?, Are there complementary products the consumer might also purchase?

Back

What portion of the consumer's income is required for the purchase?