2.7 Price Elasticity of Demand
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deanhoss
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12 QuestionsShow answers
  • Question 1
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    Q. Demand is unit elastic if it is less than 1.0
    answer choices
    True
    False
  • Question 2
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    Q. Demand is almost always more elastic at higher prices and less elastic at lower prices.
    answer choices
    True
    False
  • Question 3
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    Q. Suppose that elasticity of demand of socks is 0.7.  If the price of socks is reduced by 10%, how will sales be effected?
    answer choices
    sales will grow by more than 10%
    Sales will grow by 10%
    Sales will grow by less than 10%
    Sales will decrease by 10%
  • Question 4
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    Q.

    The formula for calculating price elasticity of demand is:

    answer choices

    The % change in price over the % change in quantity demanded

    The % change in quantity demanded over the % change in price

    The change in price over the change in quantity demaned

    The change in quantity demanded over the change in price

  • Question 5
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    Q.

    The price elasticity of demand for tissues is 0.66. This means the demand for tissues is relatively

    answer choices

    elastic

    unit elastic

    inelastic

    really expensive

  • Question 6
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    Q.

    The desire to have some good or service and the ability to pay for it

    answer choices

    supply

    equilibrium

    demand

    quantity demanded

  • Question 7
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    Q.

    Which of these best describes the law of demand?

    answer choices

    if prices go up, quantity demanded will fall and if prices go down, quantity demanded will go up

    if prices go up, quantity demanded will also go up and if prices go down, quantity demanded will also go down

    there is no law of demand, each situation is unique and demand and prices cannot be predicted

    prices will go up for certain goods when quantity demanded goes up and vice versa

  • Question 8
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    Q.

    A change in the price of a good causes people to buy more or less of an item. This best describes the concept of

    answer choices

    the demand curve

    change in quantity demanded

    change in demand

    elasticity

  • Question 9
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    Q.

    Elasticity refers to

    answer choices

    how producers of goods and services react to price changes

    how consumers of goods and services react to price changes

    how far a supply of scarce goods can be stretched

    how often the price of a good or service changes when quantity demanded changes

  • Question 10
    60 seconds
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    Q.

    Water has seen an increase in demand 8% this summer, while the price has decreased 12%. The PED is:

    answer choices

    1.5 inelastic

    1.5 elastic

    .67 inelastic

    .67 elastic

  • Question 11
    60 seconds
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    Q.

    Wheat has seen a decrease in demand of 5%, while the price has increased 7%. The PED is:

    answer choices

    1.4 inelastic

    1.4 elastic

    .71 inelastic

    .71 elastic

  • Question 12
    30 seconds
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    Q.

    Demand is almost always more price elastic at higher prices and less price elastic at lower prices.

    answer choices

    True

    False

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