Econ, 3. 7, Elasticity Continued

Which of the following statements about the price elasticity of demand along a downward-sloping linear demand curve is true?

It is elastic at high prices and inelastic at low prices.

Which of the following goods is likely to have the highest price elasticity of demand?

Pizza

A good is said to have a relatively elastic demand if the value of price elasticity is:

greater than 1.

Which of the following goods is likely to have the lowest price elasticity of demand?

life saving drugs

If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is

relatively inelastic.

If the absolute value of the price elasticity of demand for aspirin equals 0.8 then

the demand for aspirin is inelastic.

The slope of a demand curve is not used to measure the price elasticity of demand because

the measurement of slope is sensitive to the units chosen for price and quantity.

If the demand for a steak is unit elastic, then

the percentage change in quantity demanded is equal to the percentage change in price

If the demand for cell phone service is inelastic, then

the percentage change in quantity demanded is less than the percentage change in price (in absolute value).

Elasticity is:

the ratio of the percentage change in two variables.