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Demand for a good is said to be inelastic if the quantity demanded increases slightly when the price falls by a large amount.

A) True
B) False

Correct Answer

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The price elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in price.

A) True
B) False

Correct Answer

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The price elasticity of demand is defined as the percentage change in price divided by the percentage change in quantity demanded.

A) True
B) False

Correct Answer

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Price elasticity of demand along a linear,downward-sloping demand curve decreases as price falls.

A) True
B) False

Correct Answer

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Supply and demand both tend to be more elastic in the long run and more inelastic in the short run.

A) True
B) False

Correct Answer

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Price elasticity of supply measures how much the quantity supplied responds to changes in the price.

A) True
B) False

Correct Answer

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When demand is inelastic,a decrease in price increases total revenue.

A) True
B) False

Correct Answer

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Measures of elasticity enhance our ability to study the magnitudes of changes in quantities in response to changes in prices or income.

A) True
B) False

Correct Answer

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Price elasticity of demand along a linear,downward-sloping demand curve increases as price falls.

A) True
B) False

Correct Answer

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If demand is perfectly inelastic,the demand curve is vertical,and the price elasticity of demand equals 0.

A) True
B) False

Correct Answer

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Even the demand for a necessity such as gasoline will respond to a change in price,especially over a longer time horizon.

A) True
B) False

Correct Answer

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Elasticity measures how responsive quantity is to changes in price.

A) True
B) False

Correct Answer

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A government program that pays farmers not to plant corn on part of their land can help farmers not only through the subsidy payments to farmers who participate in the program but also by raising the market price of corn.

A) True
B) False

Correct Answer

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Demand is elastic if the price elasticity of demand is greater than 1.

A) True
B) False

Correct Answer

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When the price of knee braces increased by 25 percent,the Brace Yourself Company increased its quantity supplied of knee braces per week by 75 percent.BYC's price elasticity of supply of knee braces is 0.33.

A) True
B) False

Correct Answer

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The demand for soap is more elastic than the demand for Dove soap.

A) True
B) False

Correct Answer

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A linear,downward-sloping demand curve has a constant elasticity but a changing slope.

A) True
B) False

Correct Answer

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If we observe that when a consumer's income rises by 10%,the quantity demanded of chocolate candy bars increases by 15%,then chocolate candy bars are are a normal good for that consumer.

A) True
B) False

Correct Answer

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In general,demand curves for luxuries tend to be price elastic.

A) True
B) False

Correct Answer

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If the price of calculators increases by 15% and the quantity demanded per week falls by 45% as a result,then the price elasticity of demand is 3.

A) True
B) False

Correct Answer

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