Question

8.

When the price increases by 30 percent and the quantity demanded drops by 30 percent, the price elasticity of demand is

unitary elastic. |

elastic. |

perfectly inelastic. |

inelastic. |

perfectly inelastic. |

9.

If the cross-price elasticity of demand between Good A and Good B is 2 and the percentage change in price of Good A is 5 percent, what is the percentage change in quantity demanded of Good B?

-3 percent |

1.50 percent |

10 percent |

3 percent |

-1.25 percent |

Answer #1

**8. Answer: Unitary elastic**

Price elasticity of demand = % change in quantity demanded / % change in price

Price elasticity of demand = 30% / 30% = 1

If Price elasticity of demand = 1, demand is unitary elastic.

**9. Answer: 10%**

Cross-price elasticity of demand = % change in quantity demanded for good B / % change in price of good A

2 = % change in quantity demanded for good B / 5%

2*5% = % change in quantity demanded for good B

10% = % change in quantity demanded for good B

When the price of good "X" increases 20 percent (+20%), Harry
decreases his quantity demanded of "X" by 25 percent while Meghan
decreases her quantity demanded of "X" by 15 percent. Harry's
demand for good "X" is (relatively inelastic / unitary elastic /
relatively elastic) and Meghan's demand for good "X" is (relatively
inelastic / unitary elastic / relatively elastic).
A. Relatively inelastic; relatively
inelastic.
B. Relatively inelastic; relatively
elastic.
C. Unitary elastic; relatively
elastic.
D. Relatively elastic; relatively
elastic.

A price change causes the quantity demanded for a good to
increase by 20 percent and the total revenue of that good decreases
by 15 percent. What can you say about the price elasticity of
demand at this point.
It's elastic
It's inelastic
It's unitary elastic
It's perfectly elastic

QUESTION 21
If the percentage change in quantity demanded is greater than
the percentage change in price for good A, then the demand for good
A is
a.
inelastic.
b.
unit elastic.
c.
elastic.
d.
perfectly inelastic.
QUESTION 22
If the percentage change in quantity demanded is less than the
percentage change in price for good B, then the demand for good B
is
a.
inelastic.
b.
unit elastic.
c.
elastic.
d.
perfectly elastic.
QUESTION 23
If the percentage change...

A price change causes the quantity demanded of a good to
increase by 2 percent, while the total revenue of that good
decreased by 8 percent. Over this price range is the demand for
this good elastic, inelastic or unitary elastic? Could anyone
explain, please?

A measure of the rate of percentage change of quantity demanded
with respect to price, holding all other determinants of demand
constant is
a.
Income elasticity of demand
b.
Own price elasticity of demand
c.
Price elasticity of market equilibrium
d.
Cross price elasticity of demand
The value of the income elasticity of demand coefficient for
Good X is given as 0.1. This means that
a.
as income increases by 10 percent, quantity demanded rises by 1
percent.
b.
as income...

When the price is $2, quantity demanded is 10. When the price
rises to $8, quantity demanded falls to 2.
What is the value of the elasticity of demand? Is it elastic or
inelastic?

(60)A perfectly inelastic demand curve has an elasticity
coefficient of:
(a)1
(b)0.25
(c)∞
(d)None of the above
Akal mn wahed
Extra Credit Questions-Optional
(61)If the percentage change in the quantity supplied of
a good is less than the percentage change in price, price
elasticity of supply is:
(a)Inelastic
(b)Perfectly inelastic
(c)Elastic
(d)Unitary elastic
(62)If the percentage change in the quantity demanded of
a good is equal to the percentage change in price, price elasticity
of demand is:
(a)Inelastic
(b)Perfectly inelastic...

In Market A, a 4 percent increase in price reduces the quantity
demanded by 2 percent. In Market B, a 3 percent increase in price
reduces the quantity demanded by 4 percent. The demand in Market A
and Market B are considered______ and _______, respectively.
a) unit price-elastic; perfectly price-inelastic.
b) price-elastic; price-inelastic.
c) perfectly price-elastic; unit price-elastic.
d) price-inelastic; price-elastic.

5a)The price of car batteries increases by 10 percent and the
quantity demanded decreases by 10 percent. What is the price
elasticity of car batteries?
Unit elastic, and revenue will not change
Elastic, and revenue will increase
Elastic, and revenue will decrease
Inelastic, and revenue will increase
b)Good A and Good B have negative income elasticities, but Good
A is more negative than Good B. If the economy’s income increases,
which of the following is true?
Good A’s demand will...

(64)Suppose that the quantity of oranges sold increases
by 45 percent when the price of tangerines increases by 25 percent.
What is the coefficient of cross price elasticity of demand for
these fruits?
(a)2.5
(b)3.2
(c)1.8
(d)0.3
(65)Given the coefficient of cross price elasticity of
demand for the fruits in Q#64 above, which of the following
statements is true?
(a)They are complements
(b)Their demand curve is negatively sloped
(c)Their cross elasticity of demand is negative
(d)None of the above
(66)Which...

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