Elasticity- TRUE OR FALSE
t
Perfectly elastic demand is graphed as a horizontal line.
t
Perfectly inelastic demand is graphed as a vertical line.
f
Price elasticity of demand is calculated using the change in quantity demanded and the change in price.
t
A tax on a good whose demand is price elastic will be effective in discouraging consumption of that good.
t
How total revenue changes when a price changes can be predicted using price elasticity of demand.
t
When demand is elastic, a decrease in price will result in an increase in total revenue.
f
When demand is elastic, an increase in price will result in an increase in total revenue.
f
When demand is inelastic, a decrease in price will result in an increase in total revenue.
t
When demand is inelastic, an increase in price will result in an increase in total revenue.
t
When demand is unit elastic, a decrease in price will result in no change in total revenue.
f
When demand is unit elastic, an increase in price will result in an increase in total revenue.
f
When the slope of a demand curve is constant, price elasticity of demand is constant as well.
t
A demand curve with constant slope over all quantity values can have a continuously changing price elasticity of demand.
t
A demand curve with continuously changing slope over all quantity values can have a constant price elasticity of demand.
f
If government officials are mainly interested in generating tax revenue, then they should tax goods for which demand is price elastic.
t
The price elasticity of demand is generally negative to reflect the indirect relationship between the quantity demanded of a good and its price.