Elasticity of Demand

If the price on a product goes up the quantity demanded will go down. This follows the economic theory of:

• Law of Demand
• elasticity
• Ceteris Paribus
• Both A and C

The elasticity on a item such as gas is:

• Very elastic
• Not inelastic
• Very responsive
• Inelastic

The formula for calculating elasticity of demand is:

• The % change in price over the % change in quantity demanded
• The % change in quantity demanded over the % change in price
• The change in price over the change in quantity demaned
• The change in quantity demanded over the change in price

The following is a factor that will not cause the demand curve to shift:

• Advertising
• Population
• Price
• Consumer expectations

A change in quantity demanded is shown

• at various points on the demand curve
• with a new demand curve drawn above or below the original demand curve
• with a vertical line

Consuming more of one good because of a change in price of another good is known as the 

• income effect
• substitution effect
• elasticity effect
• demand effect

In a market economy, who decides on the prices of goods and services?

• government
• buyers and sellers
• firms
• local leaders

Which of the following is likely to increase the demand for peanut butter?

• Fewer children in the population
• News that insects have destroyed much of the peanut crop and that there will be less peanut butter on the shelves in three months.
• A big increase in the price of jelly.
• A report from the Surgeon General of the United States that eating peanut butter makes people nutty.

Which factor causes the demand curve to shift in the following situation: Bobby graduated from college and got a good job, so he decided to buy a new 2016 Passat.

• income
• population
• consumer tastes & advertising
• prices of related goods

Which economic concept is defined as the measure of how responsive consumers are to a price change?

• consumer expectations
• consumer taste
• decreasing marginal utility
• elasticity of demand