The price elasticity of demand measures how much

quantity demanded responds to a change in price.

Which of the following is not a determinant of the price elasticity of demand for a good?

the steepness or flatness of the supply curve for the good

The smaller the price elasticity of demand, the

smaller the responsiveness of quantity demanded to a change in price.

If the price of natural gas rises, when is the price elasticity of demand likely to be the highest?

one year after the price increase

The price elasticity of supply measures how responsive

sellers are to a change in price.

If an increase in income results in a decrease in the quantity demanded of a good, then for that good, the

income elasticity of demand is negative

studbud

Elasticity and It's Applications

15 termsStudBud Administration95 plays

Imported from external platform

Flashcards15 cardsFPractice quizPHost liveL

Questions 15

Answers

1
The price elasticity of demand measures how much
quantity demanded responds to a change in price.
d. demand responds to a change in supply.
price responds to a change in demand.
quantity demanded responds to a change in income
2
Which of the following is likely to have the most price elastic demand?
All three would have the same elasticity of demand
blue jeans
Tommy Hilfiger jeans
clothing
3
If the cross-price elasticity of demand for two goods is 1.25, then
None of the above
the two goods are luxuries
one of the goods is normal and the other good is inferior
the two goods are substitutes
4
Which of the following is not a determinant of the price elasticity of demand for a good?
the availability of substitutes for the good
the steepness or flatness of the supply curve for the good
the definition of the market for the good
the time horizon
5
For which of the following types of goods would the income elasticity of demand be positive and relatively large?
all normal goods
goods for which there are many complements
all inferior goods
luxuries
6
When demand is elastic, a decrease in price will cause
no change in total revenue but an increase in quantity demanded.
no change in total revenue but a decrease in quantity demanded.
an increase in total revenue.
a decrease in total revenue.
7
If the cross-price elasticity of demand for two goods is -4.5, then
the two goods are complements
one of the goods is a luxury while the other good is a necessity
one of the goods is normal while the other good is inferior
the two goods are substitutes
8
The smaller the price elasticity of demand, the
more likely the product is a luxury.
greater the responsiveness of quantity demanded to a change in price.
smaller the responsiveness of quantity demanded to a change in price.
more substitutes the product has.
9
If the price of natural gas rises, when is the price elasticity of demand likely to be the highest?
one month after the price increase
one year after the price increase
immediately after the price increase
three months after the price increase
10
The price elasticity of supply measures how responsive
buyers are to a change in production costs
sellers are to a change in price.
equilibrium price is to a change in supply
sellers are to a change in buyers' income
11
If an increase in income results in a decrease in the quantity demanded of a good, then for that good, the
price elasticity of demand is elastic
cross-price elasticity of demand is negative
income elasticity of demand is negative
income elasticity of demand is positive
12
Demand is elastic if the price elasticity of demand is
equal to 1.
equal to 0.
greater than 1..
less than 1.
13
When quantity demanded responds strongly to changes in price, demand is said to be
elastic.
dynamic.
highly viable.
fluid.
14
If the quantity supplied responds only slightly to changes in price, then
None of the above
supply is said to be inelastic
an increase in price will not shift the supply curve very much
supply is said to be elastic.
15
1. Suppose good X has a negative income elasticity of demand. This implies that good X is
a luxury
an inferior good
a necessity
a normal good

Elasticity and It's Applications Flashcards | StudBud