Micro Ch_5 Vocab Quiz Principles of Microeconomics

What is constant unitary elasticity?

• A situation where the percentage change in quantity demanded is equal to the percentage change in price.

• A situation where the percentage change in quantity demanded is greater than the percentage change in price.

• A situation where the percentage change in quantity demanded is less than the percentage change in price.

• A situation where there is no change in quantity demanded regardless of the change in price.

Cross-price elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good.

• True

• False

Elastic demand refers to a situation where the quantity demanded of a good or service changes significantly due to a change in its price.

• True

• False

Elastic supply refers to a situation where the quantity supplied changes by a ________ percentage than the change in price.

• greater

• smaller

• equal

• no

Elasticity in economics measures the responsiveness of one variable to changes in another variable.

• The absolute change in quantity demanded

• The percentage change in quantity demanded relative to a percentage change in price

• The total revenue generated from sales

• The fixed cost of production

What is the elasticity of savings?

• The responsiveness of savings to changes in interest rates

• The total amount of savings in an economy

• The difference between savings and investments

• The rate at which savings grow over time

Inelastic demand refers to a situation where the quantity demanded of a good or service is not significantly affected by changes in its price.

• True

• False

Inelastic supply refers to a situation where the quantity supplied is:

• Highly responsive to price changes

• Not responsive to price changes

• Proportional to price changes

• Decreasing as price increases

Infinite elasticity refers to a situation where the quantity demanded or supplied changes by an infinite amount in response to any change in price.

• True

• False

What is the Midpoint Method used for in economics?

• Calculating elasticity

• Determining supply and demand

• Measuring inflation

• Assessing market equilibrium