4th quiz

Refer to Figure, The demand for tickets is

• perfectly price elastic

• perfectly price inelastic

• unit price elastic

• perfectly income inelastic

Refer to Figure, The price elasticity of demand for tickets

• is equal to zero

• is equal to 1

• is infinity

• varies at every point along the demand curve

A perfectly price elastic demand curve will be a ________ line

• horizontal

• vertical

• positively sloped

• negatively sloped

When the price of coffee decreases 5%, quantity demanded increases 5%. The price elasticity of demand for coffee is ________ and total revenue from coffee sales will ________.

• elastic; decrease

• elastic; increase

• inelastic; decrease

• unit elastic; not change

When the price of fresh fish increases 10%, quantity demanded decreases 5%. The price elasticity of demand for fresh fish is ________ and total revenue from fresh fish sales will ________.

• inelastic; increase

• inelastic; decrease

• elastic; decrease

• elastic; increase

When the price of fresh fish increases 10%, quantity demanded is unchanged. The price elasticity of demand for fresh fish is

• perfectly inelastic

• elastic

• inelastic

• unitary elastic

When the price of coffee increases 5%, quantity demanded decreases 10%. The price elasticity of demand for coffee is ________ and total revenue from coffee sales will ________.

• inelastic; increase

• inelastic; decrease

• elastic; increase

• elastic; decrease

The ABC Computer Company wants to increase the quantity of computers it sells by 5%. If the price elasticity of demand is -2.5, the company must

• increase price by 2.0%

• decrease price by 2.0%

• increase price by 0.5%

• decrease price by 0.5%

A government wants to reduce electricity consumption by 10%. The price elasticity of demand for electricity is -5. The government must ________ the price of electricity by ________.

• raise; 2.0%

• raise; 0.5%

• raise; 1.25%

• lower; 0.5%

A government wants to reduce electricity consumption by 5%. The price elasticity of demand for electricity is -0.5. The government must ________ the price of electricity by ________.

• raise; 10.0%

• raise; 1.0%

• raise; 0.1%

• lower; 0.5%