Micro assignment 3

If consumers completely cease purchasing a product when its price increases by any amount, then demand is

perfectly elastic

when calculating price elasticity of demand, if the percentage change in price is negative, then the percentage change in quantity demanded is typically

positive

Suppose that if the price of plane tickets increased, more people would choose to travel by train. If this happened, you would know that:

the cross-price elasticity between plane tickets and train tickets is positive.

When Joe's Gas raises its price for regular unleaded gasoline, total revenue from regular unleaded gas falls to zero. It must be the case that

the demand for Joe's regular unleaded gasoline is perfectly elastic

the tendency for someone to purchase more of a good or service as its price falls is captured by

the law of demand

if 20% increase in the price of a good leads to a 60% decrease in the quantity demanded, then what is the price elasticity of demand

3

if two products are substitutes, then the

cross price elasticity of demand between them will be positive

the responsiveness of the quantity demanded of one good to a change in the price of a different good is measured by the

cross-price elasticity of demand

if the price elasticity of demand for a good is greater than one, then the demand for that good is

elastic

if the price of textbooks increases by one percent and the quantity demanded falls by one-half percent, then demand for textbooks is

inelastic

If demand is ______ with respect to price, a price increase will ______ total revenue.

inelastic, increase

suppose two demand curves intersect and so have a point in common. At that point, demand shown by the steeper curve will be _____ the flatter curve

less elastic than

If most consumer goods and services are ______, then most income elasticities are ______.

normal; positive

the price elasticity of demand for a good measures the responsiveness of

quantity demanded to a one percent change in price of that good