5. The cross elasticity of demand for a substitute is ____________. Select one: a.equal to zero b.equal to one c.greater than zero d.less than zero
Multiple Choice
5. The cross
Select one:
a.equal to zero
b.equal to one
c.greater than zero
d.less than zero
6. Factors that influence the elasticity of demand include all of the following except ____________.
Select one:
a.
time elapsed since a
b.
closeness of substitutes
c.
the elasticity of supply
d.
proportion of income spent on the good
7. Which of the following factors would result in a good having an elastic demand?
Select one:
a.
The price of the good is low relative to a consumer's income
b.
The good is a luxury
c.
The time between the change in price and consumption of the good is short.
d.
There are few substitutes for the good
8. A 1% increase in the price of good B leads to a 2% decrease in the demand for good A. The cross elasticity of demand is...
Select one:
a.1/2
b.-2
c.(-1/2)
d.2
9.
Select one:
a.
None of the other choices
b.
How responsive the quantity demanded for a good is to a change in its price
c.
How responsive the price of a good is to a change in its demand
d.
How responsive the demand for a good is to a change in income
10. Which of the following goods does good X in the question above likely to represent?
Select one:
a.
Designer clothing
b.
Cigarettes
c.
Prescription medication
d.
Alcohol
11. Which of the following is true of a firm's price elasticity of supply?
Select one:
a.
In the short run Es will be between 0 and 1 and the supply curve will be steep.
b.
In the immediate market period Es will be 0 and the supply curve will be vertical
c.
In the long run, Es will be greater than 1 and the supply curve will be flatter than in choice 2
d.
All of the other choices
13. If a change in price of a good has no effect on the quantity demanded, then...
Select one:
a.
The good is elastic
b.
The good is perfectly inelastic
c.
The good is inelastic
d.
The good is perfectly elastic
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