The price elasticity of demand is a measure of
the amount of a product purchased when income increases.
how much a change in demand affects the equilibrium price.
he equilibrium price of a product
buyers' responsiveness to changes in the price of a product
whether a product is a substitute or a complement.
The price elasticity of demand calculated as the ________ divided by the ________.
change in quantity demanded; change in price
change in price; change in the quantity demanded
percentage change in the quantity demanded; percentage change in price
percentage change in the quantity demanded; change in price
percentage change in price; percentage change in the quantity demanded
Suppose that a 5% increase in the price of a book resulted in a 2.5% decrease in the quantity demanded of the book. The price elasticity of demand for the book is ________, which can be described as ________.
2, unit elastic.
0.5, elastic
2.5, elastic
2.5, inelastic
0.5, inelastic
If a good has many close substitutes, then its demand is most likely
Unit Elastic
Elastic
Perfectly inelastic
inelastic
elastic or inelastic depending on whether the price of the good is increasing or decreasing
Which of the following is true? i. The easier it is to find substitutes for a good, the more price elastic the demand for the good is. ii. The demand for a good is more price elastic the smaller the proportion of income spent on it. iii. If demand is price elastic, lowering the price leads to a decrease in total revenue.
Only i
Only ii
Only iii
i and ii
i and iii
When we use the midpoint method to compute the price elasticity of demand we use
The original price and the average quantity
The original quantity and the average price
The average price ad the original quantity
The average price and the average quantity
Either the original or new price, and the average quantity
What is measured by the price elasticity of supply?
The price elasticity of supply measures how responsive producers are to changes in income
The price elasticity of supply measures how responsive producers are to changes in the price of other goods.
The price elasticity of supply measures how responsive producers are to changes in the price of a product.
The price elasticity of supply is a measure of the slope of the supply curve.
The price elasticity of supply measures how responsive producers are to changes in the cost of producing a product
If the price elasticity of supply for a good is 10, then supply is
Perfectly Elastic
Inelastic
The extent to which the demand for a good changes when the price of a substitute or complement changes, other things remaining the same, is measured as the
price elasticity of supply
cross elasticity of demand
price elasticity of demand
income elasticity of demand
cross income elasticity of demand
The income elasticity of demand is ____________ if the good is ___________ good.
positive; an inferior
less than one; an inferior
positive; a substitute
negative; a normal
positive; a normal
