NEW
Font size
Worksheetschap 5
Total questions: 16
Worksheet time: 8mins
The price elasticity of demand measures
buyers’ responsiveness to a change in the price of a good
the extent to which demand increases as additional buyers enter the market
how much more of a good consumers will demand when incomes rise.
the movement along a supply curve when there is a change in demand.
The price elasticity of demand for eggs
will be lower if there is a new invention that is a close substitute for eggs
is computed as the percentage change in quantity demanded of eggs divided by the percentage change in price of eggs
will be higher if consumers consider eggs to be a necessity.
All of the above are correct
For a particular good, a 2 percent increase in price causes a 12 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
There are no close substitutes for this good.
The good is a luxury
The market for the good is broadly defined
The relevant time horizon is short
For a particular good, a 5 percent increase in price causes a 15 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
There are many substitutes for this good
The good is a necessity
The market for the good is broadly defined
The relevant time horizon is short
For a particular good, a 10 percent increase in price causes a 5 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
There are many close substitutes for this good.
The good is a necessity
The market for the good is narrowly defined
The relevant time horizon is long
For a particular good, a 10 percent increase in price causes a 15 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
There are no close substitutes for this good.
The good is a necessity
The market for the good is broadly defined
The relevant time horizon is long
For a particular good, a 5 percent increase in price causes a 2 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
There are many close substitutes for this good.
The good is a luxury
The market for the good is broadly defined
The relevant time horizon is long
For a particular good, a 10 percent increase in price causes a 3 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
The relevant time horizon is short
The good is a luxury.
The market for the good is narrowly defined
There are many close substitutes for this good
Which of the following is likely to have the most price elastic demand?
gasoline in the short run
dentist’s visits
ice cream
deodorant
Which of the following is likely to have the most price inelastic demand?
laptop computers
iPod shuffles
designer jeans
college tuition for a junior or senior
Which of the following could be the cross-price elasticity of demand for two goods that are complements?
-1.3
0
0.2
1.4
For which of the following goods is the income elasticity of demand likely lowest?
Water
sapphire pendant necklaces
filet mignon steaks
fresh fruit
If the cross-price elasticity of two goods is positive, then the two goods are
Substitutes
complements.
normal goods.
inferior goods.
If a 15% change in price results in a 20% change in quantity supplied, then the price elasticity of supply is about
1.33, and supply is elastic.
1.33, and supply is inelastic.
0.75, and supply is elastic.
0.75, and supply is inelastic.
If the demand for textbooks is inelastic, then a decrease in the price of textbooks will
increase total revenue of textbook sellers
decrease total revenue of textbook sellers.
not change total revenue of textbook sellers
There is not enough information to answer this question
If the demand for apples is elastic, then an increase in the price of apples will
increase total revenue of apple sellers.
decrease total revenue of apple sellers.
not change total revenue of apple sellers
There is not enough information to answer this question
