PED & PES

When economists use ceteris paribus, they are looking for what happens to supply and demand when only the ____________ changes.

• price

• quantity supplied

• quantity demanded

• quantity

If demand is inelastic, a small change in price has ________________ on how much people will buy it.

• very little affect

• a large affect

The law of demand states that if prices for something are lower, then people will buy:

• more of it.

• less of it.

Using a celebrity to increase people's demand for a product will shift a demand curve:

• to the right

• to the left

• none.

Bingo Night tickets in a small local town goes from $5 to $8. Which effect will this change in price have?

• The demand curve will shift to the left.

• The quantity demanded will increase.

• The quantity demanded will decrease.

At $3 per gallon, people will purchase:

• 70 million gallons of gas.

• 90 million gallons of gas.

• 50 million gallons of gas.

• 40 million gallons of gas.

A 10 percent decrease in price increases the quantity demanded of scented candles by 3 percent. The price elasticity of demand for scented candles is:

• 0.3

• 3.33

• 30

• 10%

If the selling price of a good rises, what is the relationship with the quantity supplied?

• none

• the quantity supplied will decrease

• companies will begin to produce more

As a factor to influence the elasticity of supply, time is:

• the greatest factor.

• the least factor.

A subsidy by the government has a direct effect upon _______.

• supply

• demand