Question

____ 40. The price elasticity of a vertical demand curve is
always

a. infinitely large.

b. zero.

c. one.

d. increasing as price increases.

____ 41. Along a perfectly elastic demand curve,

a. the slope is always zero.

b. the price elasticity of demand is 1.

c. consumer purchases will not respond at all to a change in
price.

d. All of the above are true.

____ 42. A price cut will increase the revenue a firm receives
if the demand for its product is

a. elastic.

b. inelastic.

c. of unit elasticity.

d. straight elastic.

____ 43. In an attempt to raise sales, Hannah cut prices in
her bookstore by 20 percent. If the dollar value of her sales
remained constant, that indicates

a. old customers bought no more books.

b. no new customers bought books.

c. the quantity of books sold increased 20 percent.

d. the demand curve is vertical.

____ 44. A demand curve to remain unit elastic along its
entire length should

a. cross the X axis.

b. touch the X axis but not the Y axis.

c. never touch either the X or the Y axis.

d. touch the Y axis but not the X axis.

Answer #1

Ans:

40) Option B

Zero

The price elasticity of a vertical demand curve is always zero

41) Option A

the slope is always zero

The perfectly elastic demand curve is a horizontal curve and the the slope is always zero?.

42) Option A

elastic.

when the demand is elastic change in demand is greater than the change in price.Hence a decrease in price will increase the revenue.

43) Option C

the quantity of books sold increased 20 percent.

when the demand is elastic, change in demand is greater than the change in price.Hence a decrease in price will increase the revenue.?In this case the price is decrease by 20 percent and quantity demanded is increased by 20 percent making sales constant.

As you move up along the demand curve, the price elasticity of
demand:
Select one:
a. Becomes more inelastic
b. Is unchanged
c. Becomes infinite
d. Becomes more elastic
e. Falls to zero

1-As we move up the demand curve, the price elasticity of demand
* A) increases B) decreases C) becomes unitary D) does not
change
2-If the price of lemonade increases relative to the price of
grape juice, the demand for: * A) grape juice will decrease. B)
grape juice will increase. C) lemonade will decrease. D) lemonade
will increase.
3-An increase in price will result in no change in total revenue
if: * A) the percentage change in price is...

The difference between price elasticity of demand and income
elasticity of demand is that
A. income elasticity of demand examines how an individual's
income changes when prices change and the price elasticity of
demand examines how quantity demand changes when price changes.
B. income elasticity measures the responsiveness of income to
changes in supply while price elasticity of demand measures the
responsiveness of demand to a change in price.
C. income elasticity refers to a horizontal shift of the demand...

For the demand curve Q=50−P, what is the own-price elasticity of
demand when P=16 2/3 (that is, 50/3)? Is demand elastic, inelastic,
or unit elastic at that point?
a) -0.5, inelastic
b) -1, unit elastic
c) -0.5, elastic
d) 33.3, inelastic
e) 33.3, elastic

If the slope of a demand curve is infinite, then the price
elasticity of demand is:
Select one:
a. zero.
b. infinite.
c. one.
d. equal to the price of the good.

The value of the price elasticity of demand for good y is
equal to -2.0 this would imply that the price elasticity of demand
for good y is:
Select one:
a. inelastic
b. unit elastic
c. the elasticity cannot be determined with the information
given
d. elastic

For a unitary elastic demand curve, the price elasticity of demand
is everywhere ___________ and total expenditures on the good
________________ as price increases.
Select one:
a. - 1, decreases
b. - 1, remain constant
c. - 1, increases
d. undefined, increases

4A
The price elasticity along a negatively sloped linear demand
curve
1 changes at every point
2 is less than 1
3IS INFINITE
4 is equal to 1
5 is zero
28A
If demand curve is more elastic relative to supply
sellers pay a larger portion of the excise tax.
B.
consumer price increases by the amount of the tax.
C.
entire burden of the tax is borne by the sellers.
D.
sellers pay a smaller portion of the excise...

Price Elasticity of Demand for good X: −0.34
Income Elasticity of Demand for good X: 0.56
Cross Price Elasticity of Demand for goods X and Y: 0.04
Given the information above, determine the following:
1. whether good X is elastic, unit elastic, or inelastic
2. whether good X follows the “law” of demand
3. whether good X is normal or inferior
4. whether good X is a luxury or a necessity
5. whether good X and good Y are complements,...

Total utility can be objectively measured in numbers that
indicate usefulness or benefit to the consumer.
____ 2. Consumers should purchase quantities of a good to the
point where MU > P.
____ 3. Voluntary exchange requires that there must be mutual
gain.
____ 4. Points along a budget line represent the maximum
combinations of two commodities that a consumer can afford.
____ 5. The budget line represents a consumer's preferences
for a commodity.
____ 6. A change in consumer...

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