Question 1

If the price elasticity of demand for a good equals one,then the demand for that good with respect to price,is:
A)elastic.
B)inelastic.
C)unitary elastic.
D)perfectly elastic.

Accepted Answer

If the percentage change in quantity equals the percentage change in price,then the fraction will equal one.This is called unitary elasticity.

Question 2

The demand for a good is inelastic with respect to price,if the price elasticity of demand is:
A)equals one.
B)is greater than one.
C)is less than one.
D)equals negative one.

Accepted Answer

If the percentage change in quantity is greater than the percentage change in price,then the elasticity will be greater than one.When elasticity is greater than one,demand is price elastic.

Question 3

If the price of a good increases by 20% and that leads to a decrease in quantity demanded by 60%,what is the price elasticity of demand for that good?
A)30.
B)3.
C)1/3.
D)1/6.

Accepted Answer

Price elasticity of demand is the percentage change in quantity demanded divided by the percent change in price,60/20 = 3.

Question 4

When calculating price elasticity of demand,if the numerator is positive,the denominator is:
A)always greater than one.
B)always greater than zero.
C)sometimes positive and sometimes negative.
D)always less than zero.

Accepted Answer

If the percent change in price is negative (the price falls)the change in quantity demanded will be positive according to the law of demand.

Question 5

The demand for a good is unitary elastic with respect to price if the price elasticity of demand is:
A)equal to one.
B)greater than one.
C)less than one.
D)greater than negative one.

Accepted Answer

If the percentage change in quantity equals the percentage change in price,then the fraction will equal one.This is called unitary elasticity.

Question 6

If the price elasticity of demand for cell phone service is 3,if the price increases by 1%,quantity demanded decreases by:
A)0.33%.
B)0.67%.
C)1.33%.
D)3%.

Accepted Answer

Price elasticity of demand is the percentage change in quantity demanded divided by the percent change in price,here % change in quantity/1 = 3,so the percent change in quantity must be 3.

Question 7

If the price elasticity of demand for a good is greater than one,then the demand for that good,with respect to price,is:
A)elastic.
B)inelastic.
C)unitary elastic.
D)perfectly elastic.

Accepted Answer

If the percentage change in quantity is greater than the percentage change in price,then the elasticity will be greater than one.When elasticity is greater than one,demand is price elastic.

Question 8

If the price elasticity of demand for pineapple is 0.75,a 4% increase in the price of pineapple will lead to a:
A)3% decrease in the quantity demanded of pineapple.
B)3% increase in the quantity demanded of pineapple.
C)4% decrease in the quantity demanded of pineapple.
D)0.1875% increase in the quantity demanded of pineapple.

Accepted Answer

Price elasticity of demand is the percentage change in quantity demanded divided by the percent change in price,here % change in quantity/4 = 0.75.The percent change in quantity must be 3.An increase in price will reduce quantity demanded,so the change is a decrease of 3%.

Question 9

Price elasticity of demand is often expressed as a positive number because:
A)using the formula yields a positive number.
B)demand has a positive slope.
C)it's convenient to use absolute values even though the formula yields non-positive numbers.
D)both the numerator and the denominator in the formula are negative.

Accepted Answer

Price elasticity is always negative by the law of demand,but by convention,it is expressed as the absolute value.

Question 10

When the price of hot dogs is $1.50 each,500 hot dogs are sold every day.After the price falls to $1.35 each,510 hot dogs are sold every day.At the original price,what is the price elasticity of demand for hot dogs?
A)66.67
B)5
C)2
D)0.2

Accepted Answer

The percentage change in quantity demanded is 0.02 (5/500)and the percentage change in price is 0.1 ($0.15/$1.50),so elasticity is 0.02/0.1 = 0.2.

Question 11

If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent,then demand for textbooks is:
A)negative.
B)price inelastic.
C)price elastic.
D)perfectly inelastic.

Accepted Answer

If the percentage change in quantity is less than the percentage change in price,then the elasticity will be less than one.When elasticity is less than one,demand is price inelastic.

Question 12

Price elasticity of demand is a measure of:
A)consumer response to a change in a good's price.
B)a market's ability to restore equilibrium after a change in a good's price.
C)the demand for a good or service.
D)consumer response to excess demand.

Accepted Answer

Price elasticity of demand is the percentage change in quantity demanded that results from a 1 percent change in price.

Question 13

If the price of cheese falls by one percent and the quantity demanded rises by 3 percent,then the price elasticity of demand for cheese has a value of:
A)30.
B)0.30.
C)0.333.
D)3.

Accepted Answer

Price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is 3% / 1% = 3.

Question 14

If a 10% decrease in the price of good leads to a 20% increase in the quantity demanded of that good,the price elasticity of demand for that good would be:
A)½.
B)2.
C)10.
D)20.

Accepted Answer

Price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Using the information given, we can calculate the price elasticity of demand as:
%ΔQd / %ΔP = 20% / -10% = -2
Note that the negative sign indicates that the price and quantity demanded are inversely related. The absolute value of -2 is 2, so the price elasticity of demand for this good is 2. Therefore, the answer is B.

Question 15

If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent,then the price elasticity of demand has a value of:
A)0.05.
B)0.5.
C)2.
D)5.

Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is -0.5% / 1% = -0.5, which is 0.5 in absolute value.

Question 16

The percentage change in quantity demanded that results from the percentage change in price is known as the:
A)price elasticity of supply.
B)price elasticity of demand.
C)income elasticity of demand.
D)cross-price elasticity of demand.

Accepted Answer

Price elasticity of demand is the percentage change in quantity demanded that results from a 1 percent change in price.

Question 17

If the price elasticity of demand for tickets to a football game is 2 then,when the price increases by 1%,quantity demanded decreases by:
A)½%.
B)1%.
C)2%.
D)4%.

Accepted Answer

Price elasticity of demand is the percentage change in quantity demanded divided by the percent change in price,here % change in quantity/1 = 2,so the percent change in quantity must be 2.

Question 18

The demand for a good is elastic with respect to price if the price elasticity of demand is:
A)equal to one.
B)greater than one.
C)less than one.
D)equal to zero.

Accepted Answer

If the percentage change in quantity is greater than the percentage change in price,then the elasticity will be greater than one.When elasticity is greater than one,demand is price elastic.

Question 19

If the price elasticity of demand for chicken is 2,a 20% decrease in the price of chicken will lead to a:
A)10% decrease in the quantity demanded of chicken.
B)10% increase in the quantity demanded of chicken.
C)40% decrease in the quantity demanded of chicken.
D)40% increase in the quantity demanded of chicken.

Accepted Answer

Price elasticity of demand is the percentage change in quantity demanded divided by the percent change in price,here % change in quantity/20 = 2.The percent change in quantity must be 40.A decrease in price will increase quantity demanded,so the change is an increase of 40%.

Question 20

The price elasticity of demand for a good is the response of:
A)demand to a one percent change in price of that good.
B)demand to a one percent change in price of the related good.
C)quantity demanded to a one percent change in price of that good.
D)quantity demanded to a one percent change in price of the related good.

Accepted Answer

Price elasticity of demand is the percentage change in quantity demanded that results from a 1 percent change in price.

Quiz 4: Elasticity

If the price elasticity of demand for a good equals one,then the demand for that good with respect to price,is:

The demand for a good is inelastic with respect to price,if the price elasticity of demand is:

If the price of a good increases by 20% and that leads to a decrease in quantity demanded by 60%,what is the price elasticity of demand for that good?

When calculating price elasticity of demand,if the numerator is positive,the denominator is:

The demand for a good is unitary elastic with respect to price if the price elasticity of demand is:

If the price elasticity of demand for cell phone service is 3,if the price increases by 1%,quantity demanded decreases by:

If the price elasticity of demand for a good is greater than one,then the demand for that good,with respect to price,is:

If the price elasticity of demand for pineapple is 0.75,a 4% increase in the price of pineapple will lead to a:

Price elasticity of demand is often expressed as a positive number because:

When the price of hot dogs is $1.50 each,500 hot dogs are sold every day.After the price falls to $1.35 each,510 hot dogs are sold every day.At the original price,what is the price elasticity of demand for hot dogs?

If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent,then demand for textbooks is:

Price elasticity of demand is a measure of:

If the price of cheese falls by one percent and the quantity demanded rises by 3 percent,then the price elasticity of demand for cheese has a value of:

If a 10% decrease in the price of good leads to a 20% increase in the quantity demanded of that good,the price elasticity of demand for that good would be:

If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent,then the price elasticity of demand has a value of:

The percentage change in quantity demanded that results from the percentage change in price is known as the:

If the price elasticity of demand for tickets to a football game is 2 then,when the price increases by 1%,quantity demanded decreases by:

The demand for a good is elastic with respect to price if the price elasticity of demand is:

If the price elasticity of demand for chicken is 2,a 20% decrease in the price of chicken will lead to a:

The price elasticity of demand for a good is the response of: