1
Created by Boundless
Which of the following lists the terms that describe a good's price elasticity from
most responsive to a change in price to least responsive to a change in price?
A
Unit elastic, perfectly elastic, relatively elastic, relatively
inelastic, perfectly inelastic
B
Perfectly elastic, relatively elastic, unit elastic, relatively
inelastic, perfectly inelastic
C
Perfectly inelastic, relatively inelastic, unit elastic, relatively
elastic, perfectly elastic
D
Unit elastic, perfectly inelastic, relatively inelastic, relatively
elastic, perfectly elastic
2
Created by Boundless
A good with a price elasticity of demand of 0.8 is ____________.
A
Relatively elastic
B
Relatively inelastic
C
Perfectly elastic
D
Perfectly inelastic
3
Created by Boundless
For which type of good would you expect the price elasticity of demand to be
highest?
A
Normal goods
B
Giffen goods
C
Luxury goods
D
Inferior goods
4
Created by Boundless
A good for which demand increases more quickly than income is a
_______________.
A
Giffen good
B
normal good
C
luxury good
D
inferior good
5
Created by Boundless
A good that is perfectly elastic will have a ___________.
6
A
horizontal supply curve
B
shallow supply curve
C
vertical supply curve
D
steep demand curve
Created by Boundless
Imagine the percentage change in supply of a good is equal to 50% and
percentage change in price is equal to 25%. The price elasticity is equal to
________, which means it is _____________.
A
2; relatively elastic
B
1/2; relatively elastic
C
2; relatively inelastic
D
1/2; relatively inelastic
7
Created by Boundless
Assume a widget firm decides to raise prices by 10% and then sees its revenue
rise by 5%. The demand for widgets must be ______________.
A
Perfectly inelastic
B
Relatively inelastic
C
Relatively elastic
D
Unit elastic
8
Created by Boundless
Assume the demand for water is perfectly inelastic. If a firm raises the price of
water by 8%, what could be the subsequent change in its revenue?
A
-8%
B
4%
C
0%
D
8%
9
Created by Boundless
Perfectly inelastic is equal to _________ (1), while perfectly elastic is equal to
__________(2).
A
One (1); zero (2)
B
Zero (1); one (2)
C
Infinity (1); one (2)
D
Zero (1); infinity (2)