Micro Economics Ch 6 Q's and A's

The value of price elasticity of demand is more likely to be above 1 if

A. Consumers have a long time to adjust to a price change.

Which of the following is a determinant of the price elasticity of demand

A. availability of substitute goods

If the product has an elastic demand it means that

A. consumers are relatively sensitive to a change in the price of the product

When the elasticity of demand for a particular good is between zero and -1

B. Demand is inelastic

Which of the following is true of the price elasticity of demand of a product

B. It is calculated as the percentage change in the quantity demanded of the product divided by the percentage change in the price of the product

If the demand for cream cheese produced by a dairy is perfectly elastic then

B. The demand curve will be horizontal

Price elasticity of demand measured over a range of prices and quantities along the demand curve

B. are elastic

when the income elasticity of demand for a good is negative one can correctly conclude that

B. the good is an inferior good

The less responsive consumers are to a change in the price of a product

C. The more price- inelastic is the demand curve

Demand for a good becomes more elastic as

C. a good makes up a larger percentage of a consumers budget

Goods whose income elasticity pf demand is greater than zero are

C. normal goods

A measure of responsiveness of quantity supplied to changes in price is known as

C. price elasticity of supply

When the cross price elasticity of demand for two goods is a positive number one can correctly conclude that

C. the goods are substitute goods

The price elasticity of demand for a product is the measure of the

D. Degree of consumer responsiveness to changes in the price of the product.

Which of the following is explained by the price elasticity of demand for a product

D. The effect of the changes in price on the quantity demanded of the product

When economists speak of the short run they are referring to

D. a period of time short enough that the quantities of at least one resource cannot be varied

Assume that the demand curve for a certain good is a vertical line this vertical demand curve illustrates the idea that

E. People will not change the quantity demanded of the good when its price is changed

A horizontal demand curve shows that demand for a good is

E. Perfectly elastic

If the demand for a good is perfectly inelastic then

E. Quantity demanded does not change when price of the good changes.

Price elasticity of demand measures the responsiveness of quanitity demanded in a market to a change in price

True