Question 1

A demand curve that is drawn as a vertical line illustrates price elasticity equal to:

Accepted Answer

A vertical demand curve displays zero price elasticity.

Question 2

Suppose the price P on a given demand curve results in a price elasticity of demand equal to 1.Any price higher than P will lie on the _______ part of the demand curve,and any price lower than P will lie on the _______ part of the demand curve.

Accepted Answer

Along a straight-line demand curve,price elasticity at the mid-point is always one.At higher prices,demand is price-elastic,and at lower prices demand is price-inelastic.

Question 3

If consumers completely cease purchasing a product when its price increases by any amount,demand is classified as:

Accepted Answer

A horizontal demand curve displays infinite price elasticity.

Question 4

Suppose the price P on a given demand curve results in a price elasticity of demand equal to 1.This price is on the ______ portion of the demand curve.

Accepted Answer

Along a straight-line demand curve,price elasticity at the mid-point is always one.

Question 5

Suppose the price price P gives us a price elasticity of demand equal to 1.It is on the ______ portion of the demand curve.

Accepted Answer

Along a straight-line demand curve,price elasticity at the mid-point is always one.

Question 6

If the slope of the demand curve is zero,the price elasticity of demand is:

Accepted Answer

A horizontal demand curve displays infinite price elasticity.

Question 7

As one moves down along a linear demand curve (i.e. ,from high price,low quantity pairs to low price,high quantity pairs),the demand:

Accepted Answer

At the top of the demand curve,a one unit change in price will be a relatively small percentage change and a one unit change in quantity,because it is a small quantity to begin with,will be fairly large.A large percentage quantity change relative to a small percentage change in price is elastic.The opposite is true at the bottom of a demand curve.Price is low,so a one-unit change is a fairly large percentage,but quantity is large so a one-unit change is a small percentage.This combination is associated with inelastic demand.

Question 8

At the midpoint of a straight-line demand curve,the price elasticity of demand is always:

Accepted Answer

Along a straight-line demand curve,price elasticity at the midpoint is always one.

Question 9

If the slope of the demand curve is equal to infinity,the price elasticity of demand will be:

Accepted Answer

A vertical demand curve displays zero price elasticity.

Question 10

If the percent change in quantity demanded is zero for any percent change in the price,demand is classified as:

Accepted Answer

A vertical demand curve displays zero price elasticity.

Question 11

On a given linear demand curve,demand is ______ at high prices than at low prices.

Accepted Answer

At the top of the demand curve,a one unit change in price will be a relatively small percentage change and a one unit change in quantity,because it is a small quantity to begin with,will be fairly large.A large percentage quantity change relative to a small percentage change in price is elastic.

Question 12

Suppose the demand curve for open-heart surgery is vertical among people with serious heart conditions.Therefore,demand for open-heart surgery is _____ with respect to price.

Accepted Answer

A vertical demand curve displays zero price elasticity.

Question 13

Which determines whether a company will earn higher revenues when it raises its price?

Accepted Answer

Revenue is calculated by multiplying price times quantity found on the demand curve.

Question 14

A perfectly elastic demand curve has a slope of ______ while a perfectly inelastic demand curve has a slope of ______.

Accepted Answer

Perfect elasticity is drawn as a horizontal line;perfect inelasticity is a vertical line.

Question 15

For any horizontal demand curve,the calculated price elasticity of demand is:

Accepted Answer

A horizontal demand curve displays infinite price elasticity.

Question 16

If a demand curve is the line defined by P = $5,the absolute value of the price elasticity of demand is:

Accepted Answer

A horizontal demand curve displays infinite price elasticity.If the curve is defined as the line P = $5,it is a horizontal line at price of $5.

Question 17

Firms that produce goods with many substitutes will find that:

Accepted Answer

If consumers can choose from many substitutes,their demand is price elastic.Lower prices will cause a relatively large increase in quantity sold.

Question 18

When the price of insulin was $10,consumers demanded 100 units;when the price was $15,consumers demanded 100 units;and when the price was $20,consumers demanded 100 units.Based on this information,insulin must have a(n)_______ demand curve.

Accepted Answer

If quantity does not change at all when price changes,demand is perfectly inelastic.

Question 19

If the demand curve for a good is the line defined by Q = 1,then a decrease in the price of that good will:

Accepted Answer

If demand is defined by Q = 1,it means that regardless of price consumers will purchase one and only one unit.

Question 20

Suppose that a new drug has been approved to treat a life-threatening disease.Demand for that drug is shown on the graph below.Prior to approval of this drug,the only treatment for this condition was non-prescription pain relief.Demand for one brand of non-prescription pain reliever is also shown on the graph below. 
Refer to the figure above.At a price of $15,price elasticity of demand for the new drug is _______ price elasticity of demand for an over-the-counter pain reliever.

Accepted Answer

At any given price,the steeper demand curve is the less elastic demand.

Quiz 4: Elasticity

A demand curve that is drawn as a vertical line illustrates price elasticity equal to:

Suppose the price P on a given demand curve results in a price elasticity of demand equal to 1.Any price higher than P will lie on the _ part of the demand curve,and any price lower than P will lie on the _ part of the demand curve.

If consumers completely cease purchasing a product when its price increases by any amount,demand is classified as:

Suppose the price P on a given demand curve results in a price elasticity of demand equal to 1.This price is on the ______ portion of the demand curve.

Suppose the price price P gives us a price elasticity of demand equal to 1.It is on the ______ portion of the demand curve.

If the slope of the demand curve is zero,the price elasticity of demand is:

As one moves down along a linear demand curve (i.e. ,from high price,low quantity pairs to low price,high quantity pairs) ,the demand:

At the midpoint of a straight-line demand curve,the price elasticity of demand is always:

If the slope of the demand curve is equal to infinity,the price elasticity of demand will be:

If the percent change in quantity demanded is zero for any percent change in the price,demand is classified as:

On a given linear demand curve,demand is ______ at high prices than at low prices.

Suppose the demand curve for open-heart surgery is vertical among people with serious heart conditions.Therefore,demand for open-heart surgery is _____ with respect to price.

Which determines whether a company will earn higher revenues when it raises its price?

A perfectly elastic demand curve has a slope of while a perfectly inelastic demand curve has a slope of .

For any horizontal demand curve,the calculated price elasticity of demand is:

If a demand curve is the line defined by P = $5,the absolute value of the price elasticity of demand is:

Firms that produce goods with many substitutes will find that:

When the price of insulin was $10,consumers demanded 100 units;when the price was $15,consumers demanded 100 units;and when the price was $20,consumers demanded 100 units.Based on this information,insulin must have a(n) _______ demand curve.

If the demand curve for a good is the line defined by Q = 1,then a decrease in the price of that good will: