Chapter 4&5 Week 3 Quiz

The price elasticity of demand is

always negative

The ratio of the percentage in a dependent variable to the percentage change in an independent variable, all other things unchanged is

elasticity

A men's tie store sold an average of 30 ties per day when the price was $5 per tie but sold 50 of the same ties per day when the price was $3 per tie. Hence, the absolute value of the price elasticity of demand is

equal to 1

If the absolute value of price elasticity is greater than 1, this means the demand curve in that region is

price elastic

If total revenue goes up when price falls, the price elasticity of demand is said to be

price elastic

Which of the following will lead to a decrease in total revenue?

price increases and demand is price elastic

Price elasticity of demand measures the responsiveness of the change in

quantity demanded to a change in price

The price elasticity of a good will tend to be greater

the longer the relevant time period

Demand is price inelastic if

the percentage change in quantity demanded is relatively small in response to a relatively large percentage change in price

If the total revenue received by a firm does not change when it raises its price, this indicates that the demand for the firm's product is

unit price elastic