A positive cross price elasticity means that the

other produsct is a substitute good.

An anti-drug policy that reduces the supply of heroin might

increase street crime because addict's are highly inelastic.

When demand is inelastic,

percentage change in price more than percentage change in quantity.

studbud

BBA1002 3.1 (v.1)

10 termsStudBud Administration391 plays

Imported from external platform

Flashcards10 cardsFPractice quizPHost liveL

Questions 10

Answers

1
A small % change in price of product X resulted in a large % change in the quantity demanded for product X, demand is
perfectly inelastic.
perfectly elastic.
inelastic.
elastic.
2
A positive cross price elasticity means that the
other product is an inferior good
other produsct is a substitute good.
other product is a normal good.
other poduct is a complement good.
3
When there is more time available for the buyers to make decision about the purchase, the demand is becoming more
Elastic
Inelastic
Unit elastic
Horizontal line.
4
Demand for electricity is more __________ as compared to car.
Unit elastic
Inelastic
Elastic
income elastic
5
An anti-drug policy that reduces the supply of heroin might
reduce street crime because addict's demand for heroin is highly elastic.
increase street crime because addict's demand for heroin is highly elastic.
reduce street crime because addict's demand for heroin is highly inelastic.
increase street crime because addict's are highly inelastic.
6
Buyers’ sensitivity (or responsiveness) to its price changes is known as
Elasticity of demand
Cross price elasticity of demand
Price elasticity of demand
Income elasticity of demand
7
When demand curve is horizontal, demand is
vertical line.
perfectly elastic.
unit elastic.
perfectly inelastic.
8
When demand is inelastic,
change in price is more than change in quantity.
change is quantity is more than change in price.
percentage change in price more than percentage change in quantity.
percentage change in quantity more than percentage change in price.
9
If price decrease by 6% while quantity demanded increase by 3%. How much is the price elasticity of demand?
-0.5 (inelastic demand)
-2 (elastic demand)
-0.5 (elastic demand)
-2 (inelastic demand)
10
Positive income elasticity of 0.5 means that
the product is a normal good.
the product is a complement good.
the product is an inferior good.
the product is a substitute good.

BBA1002 3.1 (v.1) Flashcards | StudBud