Eco05L1
1
The price elasticity of demand is equal to the ____________ in the _____________ divided by the ________________ in the ______________.
change; price; change; quantity demanded
percentage change; price; percentage change; quantity demanded
change; quantity demanded; change; price
percentage change; quantity demanded; percentage change; price
2
When the percentage change in quantity demanded is greater than the percentage change in price, the demand for the good is ________________.
unit elastic
inelastic
perfectly inelastic
elastic
3
When the demand for a good is perfectly inelastic, ___________________________.
total revenue is as large as possible
the price elasticity of demand is zero
the demand curve for the good is horizontal
the price elasticity of demand is greater than 1
4
If the demand for a good is inelastic, the price elasticity of demand is ____________________.
less than zero
between 0 and 1
greater than 1
equal to 1
5
If the demand for a good is perfectly elastic, the price elasticity of demand is ______________ and the demand curve is ___________________.
zero; vertical
infinite; horizontal
infinite; vertical
zero; horizontal
6
When the supply of a good decreases, the price of the good __________ and total revenue from the sale of the good _______________.
falls; can either increase or decrease
rises; can either increase or decrease
rises; always increases
rises; always decreases
7
When the demand for a good is elastic and its price increases, the total revenue from the sale of the good will _____________.
increase initially and then decrease
decrease
increase
not change
8
Because toothpaste and toothbrushes are complements, the ____________ elasticity of demand is ______________.
income; positive
cross; negative
cross; positive
income; negative
9
Haircuts and taxi rides are normal goods, so their ____________________.
cross elasticity of demand is negative
income elasticities of demand are positive
cross elasticity of demand is positive
income elasticities of demand are negative
10
A luxury is a good or service with a demand that is _____________ and a necessity is a good or service with a demand that is _____________.
cross inelastic; cross elastic
income elastic; income inelastic
income inelastic; income elastic
cross elastic; cross inelastic
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