1. The concept of price elasticity of demand measures:
a. the slope of the demand curve.
b. the number of buyers in a market.
c. the extent to which the demand curve shifts as the result of a price decline.
d. the sensitiveness of quantities demanded to price changes.
2. When the percentage change in price is less than the resulting percentage change in quantity demanded:
a. demand is elastic.
b. demand is inelastic.
c. demand is unit elastic.
d. none of the above.
3. The elasticity of demand:
a. will be the same at each price-quantity combination on a stable demand curve.
b. tends to be elastic in high-price ranges and inelastic in low-price ranges.
c. tends to be inelastic in high-price ranges and elastic in low-price ranges.
d. is infinitely large for a perfectly inelastic demand curve.
4. Suppose that as the price of Y falls from $2.00 to $1.80 the quantity of Y demanded increases from 110 to 121. It can be concluded that the price elasticity of demand is: _______.
5. Total revenue rises as the price of a good increases if price elasticity of demand is:
a. unitary elastic
b. perfectly inelastic.
6. The demand for such products as salt, bread, and electricity tend to be:
a. relatively price elastic.
b. relatively price inelastic.
c. of unit price elasticity.
d. perfectly price elastic.