Mod 2.3: Price Elasticity of Demand

Which of the following impact price elasticity of demand? (Choose all that apply)

• Necessity

• Number of substitutes

• Number of Complements

• Wealth

• Price

Which of the following is most likely to have inelastic demand?

• cereal

• a Jeep

• medication

• soda

• strawberries

Which of the following are true statements about price elasticity of demand? (Choose 2)

• High elasticity of demand means a willingness to give up a product.

• Inelastic demand means a willingness to give up a product.

• High elasticity of demand means unwillingness to give up a product.

• Inelastic demand means unwillingness to give up a product.

• Inelasticity of demand means that a good is easy to obtain.

What does a horizontal demand curve mean?

• The good is elastic.

• The good is inelastic.

• The good is perfectly elastic.

• The good is perfectly inelastic.

• The good is unit elastic.

How is elasticity calculated?

• change in price/change in quantity

• change in quantity/change in price

• percent change in price/percent change in quantity

• percent change in quantity/percent change in price

• change in price – change in quantity

Which of the following is most likely to have the highest elasticity of demand?

• water

• gasoline

• electricity

• travel

• oxygen