Elasticity Review Set

1. 1Ceteris paribus, demand is less elastic?

   1. AThe more luxury the good.
   2. BThe larger the percentage of total budget that a family spends on a good.
   3. CThe shorter the time period for adjustment.
   4. DThe more substitutes a good has.
2. 2Spring break vacations are _________ than tuition payments because spring break vacations ___________.

   1. Amore price elastic; are more of a luxury good.
   2. Bless price elastic; have more available substitutes.
   3. Cmore price elastic; have less substitutes.
   4. Dless price elastic; are more of a luxury good.
3. 3Suppose you are in charge of pricing at Apple store and you wish to
   increase revenues from your MacBook line. Apple’s chief economist
   informs you that the price elasticity of demand for MacBook is estimated
   to be -1.17. Based on this information, you would:

   1. Aincrease price.
   2. Bdecrease price.
   3. Cnot change price.
   4. Dnot enough information to make a rational decision.
4. 4Which of the following is the best definition of the price elasticity of demand?

   1. AThe ratio of the percent change in price to the percent change in quantity demanded.
   2. BThe ratio of the percent change in quantity demanded to the percent change in price.
   3. CThe absolute value of the slope of the demand curve.
   4. DThe ratio of the percent change in demand to the percent change in income.
5. 5What does income elasticity of demand measure?

   1. Ahow responsive income is to changes in education levels.
   2. Bhow responsive price is to changes in quantity demanded.
   3. Chow responsive quantity demanded is to changes in income.
   4. Dhow responsive quantity demanded is to change in price.
6. 6If income elasticity of demand for butter is 0.77, then you could say that butter is

   1. Aan inferior good
   2. Ba luxury good
   3. Ca substitute good
   4. Da complementary good
   5. Ea normal good

Description

Business/Economics Quiz on Elasticity Review Set, created by Ricci Morales on 14/12/2018.

Author

Ricci Morales

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English

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