question
If a small percentage increase in the price of a good greatly reduces the quantity demanded for that good, the demand for that good is:
answer
Price elastic
question
The price elasticity of demand is defined as:
answer
The percentage change in the Qd of a good divided by the percentage change in the price of that good
question
In general, a flatter demand curve is more likely to be:
answer
Price elastic
question
In general, a steeper supple curve is more likely to be:
answer
Price inelastic
question
If the cross-price elasticity between two goods is negative, the two goods are likely to be:
answer
Complements
question
If the supply curve for a good is price elastic, then:
answer
The Qs is sensitive to changes in the price of that good
question
A decrease in supply (shift to the left) will increase total revenue in that market if:
answer
Demand is price inelastic
question
If an increase in the price of a good has no impact on the total revenue in that market, demand must be:
answer
Unit price elastic
question
Technological improvements in agriculture that shift the supply of agricultural commodities to the right tend to:
answer
Reduce total revenue to farmers as a whole, because demand for food is inelastic
question
If supply is price inelastic, the value of the price elasticity of supply must be:
answer
Less than 1
question
If there is an excess capacity in a production facility, it is likely that the firm's supply curve is:
answer
Price elastic
question
If demand is linear, then price elasticity of demand is:
answer
Elastic in the upper portion and inelastic in the lower portion
question
If consumers think there are very few substitutes for a good, then:
answer
Demand would tend to be price inelastic
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