Eco 2

Ceteris paribus, which of the following causes demand to be more elastic with respect to price?

a high ratio of price to income

If the price elasticity of demand is equal to 2, the good has _____ demand.

an elastic

Which of the following does not influence the price elasticity of demand?

costs of production

Higher prices will increase total revenue if the

demand is inelastic.

A demand curve that is perfectly elastic is

horizontal

Price elasticity of demand refers to

how sensitive buyers are to a change in price.

Demand is more price-elastic

in the long run.

If a good is inferior, its

income elasticity of demand is negative.

A good is normal if the sign on the income elasticity formula is

positive

If peanut butter and jelly are complementary goods, an increase in the price of peanut butter will, ceteris paribus,

reduce the demand for jelly.

The demand for normal goods

rises when incomes rise

Which of the following is not a determinant of the price elasticity of demand?

the amount of income the consumer has

To find the percentage change in price,

the change in price is divided by the average price.

If two goods are complementary goods, then

the cross-price elasticity sign will be negative

If demand is perfectly elastic,

the demand curve is horizonta

If demand is elastic, then

the elasticity number E is greater than 1

Total revenue is equal to

the income from sales.

When demand is inelastic,

the percentage change in price is greater than the percentage change in quantity demanded.

The basic formula for price elasticity of demand is

the percentage change in quantity demanded divided by the percentage change in price.

Which of the following products will have an elastic demand?

travel souvenirs