Exploring Price Elasticity of Supply and Demand

What unexpected event happened to the man in the fighter jet?

• He performed an aerial stunt

• He flew the jet back to the base safely

• He ejected himself by pressing the ejector button

• He accidentally turned off the engine

What is the formula to calculate the price elasticity of demand?

• Quantity demanded divided by total revenue

• Total revenue divided by quantity demanded

• Percentage change in price divided by percentage change in quantity demanded

• Percentage change in quantity demanded divided by percentage change in price

What is an example of a good with elastic demand?

• Tap water

• Luxury cars

• Insulin for diabetics

• Salt

What happens to total revenue when price increases for a good with inelastic demand?

• Total revenue fluctuates unpredictably

• Total revenue increases

• Total revenue stays the same

• Total revenue decreases

Which factor is a determinant of elasticity?

• The availability of substitutes

• The advertising budget

• The color of the product

• The brand of the product

What role does the availability of substitutes play in determining the elasticity of a product?

• No role

• A minor role

• A major role

• An unpredictable role

What does it mean if demand is perfectly inelastic?

• Quantity demanded responds strongly to changes in price

• Quantity demanded changes infinitely with a change in price

• Quantity demanded does not change with price changes

• Quantity demanded changes by the same percentage as the price change

How does a tax affect the demand for a product with elastic demand?

• It decreases the demand significantly

• It slightly decreases the demand

• It increases the demand

• It has no effect on the demand

Which type of elasticity is characterized by a horizontal demand curve?

• Inelastic demand

• Unit elastic demand

• Perfectly elastic demand

• Elastic demand

What is the impact of a tax on a good with perfectly inelastic demand?

• The government pays the tax

• The tax has no impact

• The buyer pays the entire tax

• The seller pays the entire tax