A perfectly inelastic demand schedule:
  • price inelastic in both the short and long run.
  • can be represented by a line parallel to the vertical axis.
  • consumers are largely unresponsive to a per unit price change.
  • the larger the number of substitutes and the greater the price elasticity of demand.
The supply of product X is perfectly inelastic if the price of X rises by:
  • perfectly inelastic.
  • 20 percent reduction in price.
  • 10 percent and quantity supplied stays the same.
  • consumers are largely unresponsive to a per unit price change.
The formula for cross elasticity of demand is percentage change in:
  • quantity demanded of X/percentage change in price of Y.
  • increase the amount demanded by more than 10 percent.
  • can be represented by a line parallel to the vertical axis.
  • consumers are largely unresponsive to a per unit price change.
Refer to the diagram. Between prices of $5.70 and $6.30:
  • inelastic.
  • less than 1.
  • relatively inelastic.
  • D1 is more elastic than D2.
The supply of known Monet paintings is:
  • relatively inelastic.
  • A perfectly inelastic demand curve:
  • perfectly inelastic.
  • 10 percent and quantity supplied stays the same.
If demand for a product is elastic, the value of the price elasticity coefficient is:
  • consumers are largely unresponsive to a per unit price change.
  • less than 1.
  • relatively inelastic.
  • greater than one.
A manufacturer of frozen pizzas found that total revenue decreased when price was lowered from $5 to $It was also found that total revenue decreased when price was raised from $5 to $Thus,
  • can be represented by a line parallel to the vertical axis.
  • the demand for pizza is elastic above $5 and inelastic below $5.
  • the demand for Coca-Cola to be more price elastic than the demand for soft drinks in general.
  • consumers are largely unresponsive to a per unit price change.
Refer to the data. Suppose quantity demanded increased by 12 units at each price, changing the equilibrium price in a direction and an amount for you to determine. Over that price range, supply is:
  • inelastic.
  • D1 is more elastic than D2.
  • B + D.
  • C.
Gigantic State University raises tuition for the purpose of increasing its revenue so that more faculty can be hired. GSU is assuming that the demand for education at GSU is:
  • inelastic.
  • demand for education at GSU is inelastic.
  • positive and therefore X is a normal good.
  • relatively inelastic.
increase the amount demanded by more than 10 percent.
  • the greater will be the price elasticity of demand.
  • buyer responsiveness to price changes.
  • price inelastic in both the short and long run.
  • can be represented by a line parallel to the vertical axis.
The demand for a necessity whose cost is a small portion of one's total income is:
  • demand for education at GSU is inelastic.
  • relatively price inelastic.
  • relatively inelastic.
  • inelastic.
Refer to the diagram. If price falls from P1 to P2, total revenue will become area(s):
  • 1.2.
  • B + D.
  • C.
  • less than 1.
Refer to the table. Over the $10-$8 price range, the elasticity coefficient of supply is:
  • greater than one.
  • inelastic.
  • less than 1.
  • relatively inelastic.
If the University Chamber Music Society decides to raise ticket prices to provide more funds to finance concerts, the Society is assuming that the demand for tickets is:
  • relatively inelastic.
  • relatively price inelastic.
  • inelastic.
  • demand for education at GSU is inelastic.
Compared to coffee, we would expect the cross elasticity of demand for:
  • consumers are largely unresponsive to a per unit price change.
  • Compared to coffee, we would expect the cross elasticity of demand for:
  • the greater will be the price elasticity of demand.
  • Goods for which the income elasticity coefficient is relatively high and positive.
If the coefficient of income elasticity of demand is positive, the product is an inferior good.
  • True
  • False
Which of the following generalizations is not correct?
  • the greater will be the price elasticity of demand.
  • less price elastic than the demand for Honda Accords.
  • Goods for which the income elasticity coefficient is relatively high and positive.
  • The price elasticity of demand is greater for necessities than it is for luxuries.
A perfectly inelastic demand curve:
  • A perfectly inelastic demand curve:
  • buyer responsiveness to price changes.
  • Price rises and demand is inelastic.
  • relatively inelastic.
A cross elasticity of demand coefficient of +2.5 indicates that the two products are substitutes.
  • True
  • False
Suppose Aiyanna's Pizzeria currently faces a linear demand curve and is charging a very high price per pizza and doing very little business. Aiyanna now decides to lower pizza prices by 5 percent per week for an indefinite period of time. We can expect that each successive week:
  • there will be 1,000 empty seats.
  • demand will become less price elastic.
  • W and Y.
  • demand is elastic at high prices.
The price of product X is reduced from $100 to $90 and, as a result, the quantity demanded increases from 50 to 60 units. Therefore, demand for X in this price range:
  • is elastic.
  • less than 1.
  • inelastic.
  • False
We would expect the cross elasticity of demand between dress shirts and ties to be:
  • negative, indicating complementary goods.
  • negative, but the minus sign is ignored.
  • Price rises and demand is inelastic.
  • greater their substitutability.
Refer to the information and assume the stadium capacity is 5,If the Mudhens' management charges $7 per ticket:
  • inelastic.
  • D1 is more elastic than D2.
  • there will be 1,000 empty seats.
  • 20 percent reduction in price.
In which of the following cases will total revenue increase?
  • The price elasticity of demand is greater for necessities than it is for luxuries.
  • Plasma screen and LCD TVs (+4.2)
  • Price rises and demand is inelastic.
  • Price rises and demand is elastic.
Refer to the diagrams. The case of complementary goods is represented by figure:
  • C.
  • B + D.
  • C
  • 1.2.
Refer to the table. Over the $6-$4 price range, supply is:
  • B + D.
  • D1 is more elastic than D2.
  • relatively inelastic.
  • inelastic.
We would expect:
  • negative, indicating complementary goods.
  • the larger the number of substitutes and the greater the price elasticity of demand.
  • the short-run supply curve for pork is less elastic than the long-run supply curve for pork.
  • the demand for Coca-Cola to be more price elastic than the demand for soft drinks in general.
Refer to the diagrams. In which case would the coefficient of cross elasticity of demand be negative?
  • greater their substitutability.
  • inelastic.
  • relatively inelastic.
  • C
(Consider This) The supply of higher education in the United States is:
  • highly price inelastic.
  • greater than one.
  • D1 is more elastic than D2.
  • Price rises and demand is elastic.
If the elasticity coefficient of supply is 0.7, supply is elastic.
  • True
  • False
For a linear demand curve:
  • D1 is more elastic than D2.
  • A perfectly inelastic demand curve:
  • The price elasticity of demand is greater for necessities than it is for luxuries.
  • demand is elastic at high prices.
Studies show that the demand for gasoline is:
  • Price rises and demand is inelastic.
  • the greater will be the price elasticity of demand.
  • less price elastic than the demand for Honda Accords.
  • price inelastic in both the short and long run.
Which of the following goods (with their respective income elasticity coefficients in parentheses) will most likely suffer a decline in demand during a recession?
  • greater their substitutability.
  • there will be 1,000 empty seats.
  • Price rises and demand is inelastic.
  • Plasma screen and LCD TVs (+4.2)
Refer to the diagrams. In which case would the coefficient of income elasticity be positive?
  • C.
  • less than 1.
  • B + D.
  • A
Antiques tend to have highly inelastic supply curves.
  • True
  • False
The demand for autos is likely to be:
  • less price elastic than the demand for Honda Accords.
  • consumers are largely unresponsive to a per unit price change.
  • 10 percent and quantity supplied stays the same.
  • increase the amount demanded by more than 10 percent.
In which of the following instances will total revenue decline?
  • price inelastic in both the short and long run.
  • Price rises and demand is elastic.
  • 10 percent and quantity supplied stays the same.
  • Price rises and demand is inelastic.
Which type of goods is most adversely affected by recessions?
  • Goods for which the income elasticity coefficient is relatively high and positive.
  • the short-run supply curve for pork is less elastic than the long-run supply curve for pork.
  • the larger the number of substitutes and the greater the price elasticity of demand.
  • No conclusion can be reached with respect to the elasticity of supply.
A linear demand curve has a constant elasticity over the full range of the curve.
  • True
  • False
It takes a considerable amount of time to increase the production of pork. This implies that:
  • the greater will be the price elasticity of demand.
  • the short-run supply curve for pork is less elastic than the long-run supply curve for pork.
  • increase the amount demanded by more than 10 percent.
  • Compared to coffee, we would expect the cross elasticity of demand for:
The demand for a product is inelastic with respect to price if:
  • can be represented by a line parallel to the vertical axis.
  • quantity demanded of X/percentage change in price of Y.
  • consumers are largely unresponsive to a per unit price change.
  • 10 percent and quantity supplied stays the same.
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