Chap 5

If a small percentage increase in the price of a good greatly reduces the quantity demanded for that good, the demand for that good is ________.

• price elastic

• unit price elastic

• price inelastic

• income inelastic

• income elastic

The price elasticity of demand is defined as ________.

• the percentage change in price of a good divided by the percentage change in the quantity demanded of that good

• the percentage change in income divided by the percentage change in the quantity demanded

• the percentage change in the quantity demanded of a good divided by the percentage change in the price of that good

• the percentage change in the quantity demanded divided by the percentage change in income

• none of the answer choices

In general, a flatter demand curve is more likely to be ________.

• price elastic

• price inelastic

• unit price elastic

• none of the answer choices

In general, a steeper supply curve is more likely to be ________.

• price elastic

• price inelastic

• unit price elastic

• none of the answer choices

Which of the following would cause a demand curve for a good to be price inelastic?

• The good is inferior.

• There are a great number of substitutes for the good.

• The good is a luxury.

• The good is a necessity.

The demand for which of the following is likely to be the most price inelastic?

• Delta airline tickets

• Transportation

• Greyhound bus tickets

• Uber rides

If the cross-price elasticity between two goods is negative, the two goods are likely to be ________.

• complements

• luxuries

• substitutes

• necessities

If a supply curve for a good is price elastic, then ________.

• the quantity supplied is sensitive to changes in the price of that good

• the quantity supplied is insensitive to changes in the price of that good

• the quantity demanded is sensitive to changes in the price of that good

• the quantity demanded is insensitive to changes in the price of that good

• none of the answer choices

If a farmer must sell all of their daily harvest of vegetables before they spoil for whatever price they are offered, once the vegetables are picked, the farmer's price elasticity of supply for fresh vegetables is ________.

• unable to be determined from this information

• infinite

• zero

• One

A decrease in supply (shift to the left) will increase total revenue in that market if ________.

• supply is price elastic

• supply is price inelastic

• demand is price elastic

• demand is price inelastic