Econ Unit 2 Review

Front

According to the law of demand, what happens to the quantity demanded when the price of a good increases, assuming all else is constant?

Back

It decreases.

Front

If the price of Nikes dropped by 25%, what type of good is Nikes considered if many consumers buy more?

Back

Elastic good

Front

Elasticity measures what aspect of consumer behavior?

Back

The responsiveness of demand or supply to price changes

Front

What does it mean when the elasticity coefficient is greater than 1 (E > 1)?

Back

Demand is elastic.

Front

Which of the following goods is most likely to have inelastic demand? Toothpicks, Electricity in your home, Nikes, Starbucks lattes

Back

Electricity in your home

Front

If the price of electricity changes by 25%, and consumers do not change their usage significantly, how is the demand classified?

Back

Inelastic

Front

Which of the following scenarios demonstrates unit elastic demand? A) A 10% increase in price leads to a 5% decrease in demand. B) A 10% decrease in price leads to a 10% increase in demand. C) A 10% increase in price leads to no change in demand. D) A 10% increase in price leads to a 20% decrease in demand.

Back

A 10% decrease in price leads to a 10% increase in demand.

Front

How does the demand curve behave when the elasticity is greater than 1?

Back

It becomes flatter.

Front

A price increase causes a small drop in the quantity demanded of a product. Which of the following is most likely true? The good is elastic. The good is inelastic.

Back

The good is inelastic.

Front

Which of the following goods is most likely to exhibit elastic demand? A) A life-saving medicine, B) Designer clothing, C) Basic groceries, D) Tap water

Back

Designer clothing