Elasticity of demand

If the elasticity of demand for college textbooks is 0.1, and the price of textbooks increases by 20%, how much will the quantity demanded change, and in what direction?

• The quantity demanded increases by 2%

• The quantity demanded decreases by 20%

• The quantity demanded decreases by 2%

• The quantity demanded remains the same

The long-run elasticity of oil demand has been estimated at 0.5. If the price of oil rises by 10%, how much will the quantity of oil demanded fall? *

• 5%

• 0.5%

• 2%

• 20%

The elasticity of demand is 0.2. Is the demand curve relatively steep or flat? Will a fall in price raise total revenue or lower it? Note: we present the elasticity in terms of its absolute value.

• Relatively steep; raise total revenue

• Relatively flat; raise total revenue

• Relatively steep; lower total revenue

• Relatively flat; lower total revenue

The elasticity of demand is 1.1. Is the demand curve relatively steep or flat? Will a fall in price raise total revenue or lower it? Note: we present the elasticity in terms of its absolute value.

• Relatively steep; raise total revenue

• Relatively flat; raise total revenue

• Relatively steep; lower total revenue

• Relatively flat; lower total revenue

If the elasticity of demand for spring break packages to Cancun is -5, and if you notice that this year in Cancun the quantity of packages demanded increased by 10%, then what happened to the price of Cancun vacation packages?

• The price fell by 10 percent

• The price fell by 2 percent

• The price increased by 2 percen

• The price remained the same