Question 1

Perfectly inelastic demand curves are vertical.

Accepted Answer

A perfectly inelastic demand curve means that quantity demanded does not respond to changes in price, resulting in a vertical line.

Question 2

Elasticity of demand equals the ratio of the percentage change in the price of a good to the percentage change in the quantity demanded.

Accepted Answer

Elasticity of demand equals the ratio of the percentage change in the quantity demanded to the percentage change in the price of a good.

Question 3

Elasticity of demand equals the ratio of the percentage change in quantity demanded to the percentage change in the price of the good.

Accepted Answer

This is the definition of price elasticity of demand.

Question 4

A straight-line demand curve has the same elasticity throughout its length.

Accepted Answer

The elasticity of a straight-line demand curve varies along its length, being elastic in the upper half, unit elastic at the midpoint, and inelastic in the lower half.

Question 5

Elasticity computations related to demand carry a minus sign to show that the demand curve is negatively sloped.

Accepted Answer

The answer of Elasticity computations related to demand carry a...

Question 6

A horizontal demand curve is perfectly elastic because a change in price will induce an infinite change in quantity demanded.

Accepted Answer

A horizontal demand curve indicates that consumers are willing to buy an infinite quantity of a good or service at a given price. Therefore, if the price changes, consumers will react by changing their quantity demanded to an infinite extent, resulting in a perfectly elastic demand curve.

Question 7

The price elasticity of demand measure is generally stated as an absolute value.

Accepted Answer

Price elasticity of demand is always measured as an absolute value because it represents the responsiveness of demand to a change in price, regardless of whether the price increases or decreases.

Question 8

The elasticity formula solves the units problem because percentages are unaffected by the units of measure.

Accepted Answer

Percentages are a unitless measure and therefore are unaffected by the units of measure. This means that the elasticity formula, which is based on percentages, is a unitless measure as well.

Question 9

Price elasticity of demand is a numerical measure of how much quantity demanded rises as price falls or quantity demanded falls as price rises.

Accepted Answer

Price elasticity of demand measures the responsiveness of quantity demanded to a change in price, whether it is an increase or decrease. So, if quantity demanded increases significantly in response to a small decrease in price, then it is said to be relatively elastic, while if quantity demanded only increases slightly in response to a large decrease in price, it is said to be relatively inelastic.

Question 10

A vertical demand curve has an elasticity of demand equal to zero.

Accepted Answer

A vertical demand curve means that quantity demanded does not change with changes in price, therefore the elasticity of demand is zero.

Question 11

A horizontal demand curve is perfectly elastic because a change in price will not induce a change in quantity demanded.

Accepted Answer

A horizontal demand curve is perfectly elastic because even a tiny change in price will lead to an infinite change in quantity demanded, not because changes in price do not affect quantity demanded.

Question 12

The market demand curve shows how the quantity demanded of a product,during a specified time period,changes as the price of that product changes.

Accepted Answer

The market demand curve is a graphical representation of the relationship between the price of a product and the quantity demanded by all consumers in a market. It shows the total quantity of a product that would be purchased by all consumers at different price levels during a specified time period.

Question 13

The quantity demanded in a market depends on many things,but the concept of elasticity focuses on the effect of changes in the price of the good.

Accepted Answer

Elasticity measures how responsive quantity demanded is to changes in price, so the statement is true.

Question 14

Elasticity of demand is calculated using percentage changes in both price and quantity.

Accepted Answer

Elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price.

Question 15

Price elasticity of demand can be written as percentage change in Q divided by percentage change in P.

Accepted Answer

This is the correct formula for price elasticity of demand.

Question 16

A line that is perfectly elastic has an elasticity of demand of zero.

Accepted Answer

A perfectly elastic demand curve has an elasticity of infinity, meaning that even a small change in price will result in an infinite change in quantity demanded.

Question 17

Elasticity is a measure of the responsiveness of change in quantity demanded to a change in price.

Accepted Answer

This statement is true. Elasticity measures the degree to which a change in price affects the quantity demanded of a product or service. High elasticity means that a small change in price leads to a large change in quantity demanded, while low elasticity means that quantity demanded is not as affected by price changes.

Question 18

The law of demand states that a lower price increases the amount of a commodity that people are willing to buy.

Accepted Answer

The law of demand is a fundamental principle in economics that states that as the price of a good or service decreases, the quantity demanded of that good or service will increase, all other factors being equal. This is based on the idea that the lower the price, the more affordable the good or service becomes, thus making it more attractive to consumers. Conversely, as the price of a good or service increases, the quantity demanded will decrease, as consumers may not be willing or able to pay the higher price.

Question 19

The demand curve depicts quantities demanded that have been gathered as prices have changed over time.

Accepted Answer

The demand curve depicts the relationship between the price of a good and the quantity demanded at those prices, typically holding other factors constant, rather than showing quantities demanded as prices have changed over time.

Question 20

Perfectly elastic demand curves are vertical.

Accepted Answer

Perfectly elastic demand curves are horizontal, indicating that consumers would buy an infinite amount of a good at one price but none at any higher price.

Quiz 6: Demand and Elasticity