Elasticities

Elasticity is the measure of ___

• responsiveness

• change

• price

• need

The law of demand tells us that consumers will respond to a price decline by buying ___ of a product.

• less

• more

• substitute

• none of the above

All such demand curves where quantity demanded is totally unresponsive to changes in price are called

• perfectly elastic demand curve

• perfectly inelastic demand curve

• Unitary elastic demand curve

• none of the above

Such horizontal demand curves, where quantity demanded is infinitely responsive to price changes, are called

• perfectly elastic demand curve

• perfectly inelastic demand curve

• Unitary elastic demand curve

• none of the above

The ___ have a property that when price decreases total revenue increases, and vice-versa.

• perfectly elastic demand curve

• perfectly inelastic demand curve

• Unitary elastic demand curve

• none of the above

The elasticity coefficient for perfectly elastic demand curve is

• zero

• one

• infinity

• none of the above

Demand curves which have an elasticity coefficient __ are called relatively inelastic or simply inelastic.

• 0

• 1

• between 0 and 1

• infinity

Luxury goods tend to have an

• elastic demand

• inelastic demand

• unitary demand

• none of the above

A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is

• 0.5.

• 20.0

• 2.0

• 10.0

A good with a horizontal demand curve has a demand

• with an income elasticity of demand of 0

• with a price elasticity of demand of infinity.

• for which there are no substitute.

• with a price elasticity of demand of 0.