True or False

Elasticity of demand refers to the change in demand when there is a change in another factor such as price or income.

• True

• False

If demand for a good or service is static even when the price changes, demand is said to be inelastic.

• True

• False

Examples of elastic goods include gasoline, while inelastic goods are items like canned goods and vitamin c tablets.

• True

• False

The law of demand states that “elasticity shows how much a good or service is demanded relative to its movement in price”.

• True

• False

Inelastic demand is when a demanded quantity for masks changes by a greater percentage compared to its percentage change in price.

• True

• False

The opposite of a market economy is a planned economy, where investment and production decisions are decided by the government.

• True

• False

Unit elastic is when a percentage change in demand equals the price.

• True

• False

A mango fruit with an elastic demand gets more sales when its price drops slightly. When its price goes up, it stays longer in the box.

• True

• False

The demand curve shows how quantity demanded for apple responds to price changes. The flatter the curve, the more elastic is the demand for an apple.

• True

• False

The midpoint elasticity is greater than 1.

• True

• False