Econ 200 Test 2 Study Guide Chapter 4

When the demand curve is perfectly horizontal, the price elasticity of demand has

- infinity

Suppose that when the price of cereal rises by 10%, the quantity demanded of cereal falls by 20%. Based on this information, what is the approximate price elasticity of demand for cereal?

-2

Price elasticity of demand is measured as the

...

If a friend says, "I am never going to buy another Avicii remix again!" his or her price elasticity of demand for Avicii remixes is______

0

When the demand curve is vertical, the price elasticity of demand is positive, negative or zero

0

Price elasticity of demand measures the _______ due to a change in ________.

change in quantity demanded, price

Salima is a devoted Coca-Cola consumer, whereas Antonia can drink either Coca-Cola or Pepsi products. Salima's demand for Coca-Cola will be ________, while Antonia's demand will be relatively more _________.

inelastic, elastic

Suppose that the price elasticity of demand is -0.80 for aspirin. We could then say that the demand for aspirin is

relatively inelastic

When the price increases by 20% and the quantity demanded drops by 20%, the price elasticity of demand is _________ elastic

unitary