Econ 5 quiz

Suppose that Bobo purchases 1 pizza per month when the price is $19 and 3 pizzas per month when the price is $15. What is the price elasticity of Bobo's demand curve?

4.25

The demand for a product is unit elastic. At a price of $20, 10 units of a product are sold. If the price is increased to $40, then one would expect sales to equal:

5 units

Economist usually refer to elasticity of demand in ____________ terms.

Absolute

If elasticity of demand is greater than one economist say that the demand is...

Elastic

_____________ is percentage change in quantity demanded divided by percentage change in price

Elasticity is demand

Is Elasticity of Demand calculated by absolute changes or percentage changes?

Percentage changes

When demand is inelastic:

consumers are not very responsive to changes in price.

If the demand curve is perfectly elastic, then an increase in supply will:

increase the quantity exchanged but result in no change in the price.

Revenue is equal to:

price times quantity

The price elasticity of demand measures the:

the responsiveness of the quantity demanded to changes in price