econ test 2 ch. 4 pt. 1

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inelastic

If the short run elasticity of demand for a good was greater than 1, an increase in the price of the good would tend to

decrease total revenue in the short run and the long run, but by more in the long run.

The larger the proportion of income spent on a product, other things equal, the

more elastic is a consumer's demand

horizontal

What type of demand curve is depicted by the graph below?

perfectly elastic

inelastic

When demand is elastic:

all of the above are correct.

1/2

increase.

Which of the following is most likely to feature inelastic demand with regard to price?

an authentic Queen Anne chair

a lower

When demand is relatively inelastic, a 5% increase in price will:

increase total revenue by less than 5%

What type of demand curve is depicted by the graph below?

perfectly inelastic

unit elastic

If a university charged a lower price for tuition during summer school than during the regular session, in search of added total revenue

administrators likely believe that demand is more elastic during summer school than during the regular session.

What type of demand curve is depicted by the graph below?

perfectly elastic

1/2.

If the demand curve for a product is horizontal, then the elasticity of demand is:

equal to infinity.

horizontal.

Which of the following is associated with inelastic demand?

a limited amount of time for consumers to respond to a price change

Which of the following is false?

All of the above are true.

Put the following products in order from the least to the most elastic demand: Domino's pizza, pizza, and pizza from Domino's on the corner of Main Street and 8th Avenue.

pizza; Domino's pizza; pizza from Domino's on the corner of Main Street and 8th Avenue

If the demand curve is perfectly elastic, the elasticity coefficient is ____ and the curve is ____.

infinity, horizontal

a lower

For a given increase in price, a greater elasticity of demand will result in a greater

decrease in quantity demanded.

unit elastic.

increase.

If the short-run elasticity of demand for bus service is 1.01, we would expect the long-run elasticity of demand to be:

greater than 1.01

If the short run elasticity of demand for a good was greater than 1, an increase in the price of the good would tend to

decrease total revenue in the short run and the long run, but by more in the long run.

If the price elasticity of demand was 4.0 (in absolute terms), a 10% off sale would lead to:

a 40% increase in purchases by customers.

unit elastic

When demand is relatively inelastic, a 5% increase in price will

increase total revenue by less than 5%.

Which of the following is not a major determinant of the price elasticity of demand?

quantity of goods available

If the demand curve is perfectly elastic, then an increase in supply will:

increase the quantity exchanged but result in no change in the price

elastic.

If the demand is perfectly inelastic, what would happen to the quantity demanded if there is a tiny increase in price?

quantity demanded will remain the same

increase.

If the price elasticity of demand was 4.0 (in absolute terms), a 10% off sale would lead to:

a 40% increase in purchases by customers.

If the elasticity of demand coefficient for a good is 6 (in absolute terms), we know:

that for every 6% increase in quantity, there will be a 1% decrease in price.

If the demand curve for a life-saving medicine is perfectly inelastic, a reduction in supply will cause the equilibrium price to:

rise and the equilibrium quantity to stay the same.

If the elasticity of demand coefficient for a good is 6 (in absolute terms), we know:

that for every 6% increase in quantity, there will be a 1% decrease in price.

The price elasticity of demand coefficient for gourmet coffee is estimated to be equal to 1.6. It is expected, therefore, that a 5% increase in price would lead to:

an 8% decrease in the quantity of gourmet coffee demanded.

all of the above

If the demand is perfectly elastic, what would happen to the quantity demanded if there is a tiny increase in price?

quantity demanded will fall to zero

If the demand is perfectly inelastic, what would happen to the quantity demanded if there is a tiny increase in price?

quantity demanded will remain the same

Example: