Elasticity

The greater the price elasticity of demand, the...

greater the responsiveness of quantity demanded to a change in price.

The demand for which one of the following is most likely to be highly inelastic

health-care services

Which of the following is true regarding the price elasticity of demand?

- Demand is generally more elastic in the long run than in the short run - Along a single demand curve, demand elasticity decreases as you move down the curve (to lower prices) - A demand curve that is flatter (has a less steep slope) is relatively more elastic than a demand curve that has a steeper slope

For which one of the following goods would you expect the demand to be mist elastic?

Chevrolet automobiles

Why do economists use the concept of elasticity in addition to measurement of the slope of the demand curve?

Elasticities are independent of the units of measure

relatively inelastic

Large % increase in the price of a good results in a small % reduction in the quantity demanded of the good

The price elasticity of demand for gasoline measures the...

Responsiveness of customers to changes in the price of gasoline

For which one of the following goods would you expect the demand to be most elastic?

Sheetz gasoline and BP gasoline

For which one of the following goods would you expect the demand to be most inelastic?

Tacos

Along the inelastic portion of a demand curve,

The percentage change in price will be more than the percentage change in quantity demanded.

The demand for which one of the following goods is most likely to be quite inelastic?

a defense lawyer

A good that takes up a very large percentage of the consumer's budget will tend to have

a elastic demand

If consumers would be willing to purchase the same quantity of a good no matter what its price was, the demand curve would

a vertical line, indicating that demand is perfectly inelastic

Compared to the long run, consumers typically __________ to price changes in the short run.

are less demand sensitive

The price elasticity of demand for a commodity is determined primarily by the

attractiveness of the substitutes for the good

Holding all other forces constant, when the price of gasoline rises, the number of gallons of gasoline demanded would fall substantially over a ten-year period because

buyers tend to be much more sensitive to a change in price when given more time to react

Of the following goods, which is most likely to have the lowest elasticity of demand?

coffee

The demand for which one of the following will be most inelastic?

food products

The demand for which one of the following is most likely to be highly elastic?

fresh green spinach

If the demand for a good is elastic, then total revenue

increases as a price decreases

vertical line for demand curve

perfectly inelastic

A successful advertising campaign would likely

reduce price elasticity of- demand by stressing the uniqueness of the product

Which one of the following goods would likely have the most inelastic demand?

salt

The demand curve for a good is very unlikely to be perfectly vertical because

scarcity and limited income restrict the ability of consumers to afford goods as they become very expensive; as the price of a good rises to high enough levels, the incentive for other suppliers to invent new substitutes for the good increases.

The more broadly a good is defined

the fewer substitutes it has so the less elastic is its demand

Demand will be more elastic,

the larger the number of goods substitutes

Demand will be more inelastic

the shorted the time the consumer has to adjust to price changes