Demand and Elasticity

An increase in the number of consumers can cause 

• the demand curve to shift left
• the demand curve to shift right 
• the demand curve to shift up
• diminishing returns 

when consumers have a need for a product that is urgent 

• the demand curve is inelastic 
• the demand curve is elastic 
• the demand curve is complementary 
• the demand curve is unit demand 

When replacing a certain item with with a less costly item is an example of

• the substitution effect 
• the income effect 
• demand elasticity 
• complements 

A city's transit authority increases the price of subway and bus tickets from $1.25 to $1.50. If the demand for these tickets is price inelastic, 1) the # of people riding buses & subways AND 2) the city's revenues will change in which way (respectively)?

• 1) Increase; 2)Increase
• 1) Decrease; 2) Increase
• 1) Decrease; 2) Decrease
• 1) No Change; 2) Increase

Demand is unit elastic if it is less than 1.0

• True
• False

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

• Law of Demand
• elasticity
• income effect
• None of the above

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 elasticity of demand for tissues is 0.66. This means the demand for tissues is

• elastic
• unit elastic
• inelastic
• really expensive

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

• Advertising
• Population
• Price
• Consumer expectations

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