determinant of the price elasticity of supply is the extent to which elect one: O a. the demand for the good is relatively elastic. O b. consumers like the quality of the good. O c. production of the good uses commonly available resources. O d. the good has many consumer substitutes.
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- Would you expect supply to play a more significant role in determining the price of a basic necessity like food or a luxury like perfume? Explain. Hint: Think about how the price elasticity of demand will differ between necessities and luxuries.The price elasticity of demand measures which of the following? Select one: O a. the slope of the demand curve O b. the rate at which demand changes when price changes O c. None of these correctly defines what price elasticity of demand measures. O d. how responsive the quantity demanded is to changes.in price O e. the percentage-slope of the demand curveIncome increases from £20,000 p.a. to £22,000 p.a. Quantity demanded per year increases from 5000 to 6000 units. Which of the following is correct? O a. The good is inferior O b. Demand is price elastic O c. Demand is price inelastic d. The good is normal
- QUESTION 34 For a particular good, a 1 percent increase in price causes a 3 percent decrease in the quantity demanded. Which one of the following statements is true? O a. The good has high income elasticity O b. The good is a necessity O c. The total revenue will increase O d. There are many close substitutes for this goodIf a good is a necessity, demand for the good would tend to be Select one: O a. horizontal O b. unit elastic. C. inelastic. d. elastic.The law of demand states that if other factorsremain constant there isSelect one:a. An exponential relationship between priceof a good and the quantity demanded.O b. A negative relationship between the priceof a good and the quantity demanded.oc. A linear relationship between price of agood and the quantity demanded.O d. A positive relationshipbetween the price ofa good and the quantity demanded.
- How is the price elasticity of demand measured? The price elasticity of demand is measured as A. the percentage change in the quantity supplied divided by the percentage change in the quantity demanded. B. the change in the quantity demanded divided by the change in price. c. the slope of the demand curve. D. the percentage change in the quantity demanded divided by the percentage change in price. O E. the quantity demanded divided by price. O O O OLooking at the relationship between elasticity and total revenue, we can see that Select one: O a. b and c b. when demand is unit elastic, small price changes don't change total revenue C. when a good is price inelastic, revenue increases when prices increase O d. when a good is price elastic, revenue increases when prices increase O e. total revenue is maximized when the elasticity has stopped changingMr. Ali decided to buy some sandwich and burger for his family. As he found the price of sandwich is more than burger, he decided to buy more burger and less sandwich. This changes in demand of these products can be best measured by O a. Cross elasticity of demand O b. Product elasticity of demand O c. Price elasticity of demand O d. Income elasticity of demand
- 16. A consequence of a Maximum price is: Select one: O a. A new equilibrium established O b. Excess supply 2C Cver production of goods O d. Excess demandThe income elasticity of demand for olive oil is. Select one: O a. negative as olive oil is considered a good of low quali O b. negative as olive oil is considered an inferior good c. positive as olive oil is considered a normal good. d. equal to zero as the demand for olive oil does not depIf the cross elasticity of demand is -2: O a. The products are substitutes O b. The products are complements O c. The good is normal O d. The good is inferior