ECN 212 Quiz 5

The elasticity of demand for a good is |-0.75|. A 4 percent increase in price will cause a:

3 percent decrease in quantity demanded.

In which of the following situations will total revenue increase

Price elasticity of demand is 1.2, and the price of the good decreases, price elasticity of demand is 0.5, and the price of the good increases, and price elasticity of demand is 3.0, and the price of the good decreases.

Suppose demand is perfectly inelastic, and the supply of the good in question decreases. As a result

The equilibrium price increases, and the equilibrium quantity is unchanged. The equilibrium quantity decreases, and the equilibrium price is unchanged

The demand for Godiva mint chocolates is likely quite elastic because

There are many close substitutes, this particular type of chocolate is viewed as a luxury by many chocolate lovers, and the market is narrowly defined

When small changes in price lead to infinite changes in quantity demanded, demand is perfectly

elastic, and the demand curve will be horizontal

The price elasticity of demand measures the

magnitude of the response in quantity demanded to a change in price.

The price elasticity of demand measures how sensitive the:

quantity demanded is to a change in price.

If the cross-price elasticity of demand for two goods is 1.25, then

the two goods are substitutes