Multiple an option questions.

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1.The price elasticity of need is: a) the proportion of the percentage adjust in quantity demanded to the percentage readjust in price. b) the responsiveness that revenue to a adjust in quantity. C) the ratio of the adjust in quantity demanded divided by the change in price. D) the solution of revenue to a readjust in price.

2.If need is price elastic, then: a) a climb in price will certainly raise total revenue. B) a fall in price will certainly raise full revenue. c) a autumn in price will reduced the amount demanded. D) a rise in price won"t have any kind of effect on full revenues.

3. Complementary items have: a) the same elasticities of demand. B) very low price elasticities that demand. C) an unfavorable cross price elasticities of demand with respect to each other. d) positive revenue elasticities of demand.

4. The price elasticity of demand generally tends to be: a) smaller in the long run than in the quick run. B) smaller in the quick run 보다 in the long run. c) bigger in the quick run 보다 in the long run. D) unrelated come the size of time.

5. If the price elasticity of supply of doodads is 0.60 and also the price rises by 3 percent, then the quantity gave of doodads will rise by a) 0.60 percent. B) 0.20 percent c) 1.8 percent d) 18 percent.

6. Expect we recognize that the price elasticity of need of great X is same to -1.2. Then, if that is price will rise by 5%, we deserve to predict through certainty that a) quantity demanded of that good will increase. B) the revenue of the firm developing that an excellent will boost by 6%. C) the revenue that the firm producing that an excellent will to decrease by 6%. D) the amount demanded the that good will diminish by 6%. e) nobody of the above.

7. A 10% increase in the price the movie ticket in Westridge 8 leader to a 15% decrease in the variety of tickets sold, describe the need for movie ticket in Westridge 8 is: a) elastic. b) inelastic. C) unit elastic. D) have the right to not tell from the information given.

8. If the cross-price elasticity in between two products is 1.5, a) the two items are high-end goods. B) the two products are complements. C) the two goods are substitutes. d) the two items are typical goods.

True/False/Uncertain. for each of the complying with statements, say even if it is it is true, false, or uncertain and explain your answer.

1. It is reasonable to suppose the cross price elasticity of demand for golf clubs and also golf balls to it is in positive.

Golf clubs and golf balls are complementary goods. This way that, together the price the golf clubs increases (a optimistic change), the consumption of golf balls to reduce (a an unfavorable change). Cross price elasticity of demand is same to the proportion of this changes and will be negative. The statement is false.

2. If the demand is perfect elastic, climate a shift in the it is provided curve does not affect the equilibrium price.

True, due to the fact that a perfectly elastic need curve is horizontal. Therefore, no matter what the change is the equilibrium price will always remain the same. (See graph.)

3. The need curve because that autos is much more elastic 보다 the need curve because that Fords.

False. A Ford can be substituted by a different model. That is not as straightforward to discover a substitute because that a car in general. The an ext substitutes a great has, the more elastic is the demand for that good. Therefore, demand for Fords is an ext elastic. 4. Intend you own a "Here comes the Sun" demorphs salon and also the demand curve for your services is bottom sloping. Further, expect that a brand-new tanning salon dubbed "Sunny Delight" opens two blocks far from your salon. Tell even if it is the adhering to three statements are true, false or uncertain and also explain your answer.

a. The need curve for your solutions shifts come the right. This new salon is a substitute for your services. ~ it has actually appeared, your consumer have an ext choice, and also some of castle will start using the new salon. So the need for your solutions will decrease, or change to the left. The explain is false.

b. The need for your services becomes more elastic. Among the determinants determining the price elasticity of demand for the an excellent is the number of substitutes. An ext substitutes - more elastic demand. The statement is true.

c. The cross-price elasticity that the need for your solutions with respect come the price charged by "Sunny Delight" is negative. This two products (services) are substitutes. The cross-price elasticity of substitutes is positive, since as the price of among them increases, the need for (and therefore the intake of) the other one increases, too. The declare is false.

Short answer Question. 5. Originally Hans Johnson to be the only consumer in the industry for "Casa de Econ" beer, created by a tiny local brewery. Once the price the "Casa de Econ" six-pack varies between $10 and $20, the price elasticity the his individual need is equal to negative 1. Now imagine the Hans has been cloned 4 times, and also now we have actually 5 the same consumers in the industry for "Casa de Econ". What will happen to the price elasticity the market need in the price variety given above? will certainly the demand become an ext price elastic, much less price elastic, or will elasticity continue to be the same? define your answer.

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Since elasticity deals with relative changes, the doesn"t matter how plenty of consumers we have in the market as long as every one of them room same. (If the quantity demanded for each the them transforms by 50%, that would median the quantity demanded in the whole market will adjust by 50%, too.) for this reason the price elasticity of need will remain the same.