Multiple option questions.
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1.The price elasticity of demand also is: a) the ratio of the portion adjust in amount demanded to the percentage adjust in price. b) the responsiveness of revenue to a adjust in amount. c) the ratio of the change in quantity demanded separated by the adjust in price. d) the response of revenue to a adjust in price.
2.If demand is price elastic, then: a) a rise in price will raise total revenue. b) a autumn in price will raise full revenue. c) a loss in price will certainly reduced the quantity demanded. d) a climb in price won"t have any impact on total profits.
3. Complementary items have: a) the very same elasticities of demand also. b) extremely low price elasticities of demand. c) negative cross price elasticities of demand also through respect to each various other. d) positive revenue elasticities of demand also.
4. The price elasticity of demand also primarily has a tendency to be: a) smaller sized in the lengthy run than in the brief run. b) smaller in the brief run than in the lengthy run. c) larger in the brief run than in the long run. d) unconcerned the size of time.
5. If the price elasticity of supply of doodads is 0.60 and the price rises by 3 percent, then the quantity supplied of doodads will certainly climb by a) 0.60 percent. b) 0.20 percent c) 1.8 percent d) 18 percent.
6. Suppose we know that the price elasticity of demand of great X is equal to -1.2. Then, if its price will rise by 5%, we deserve to predict through certainty that a) amount demanded of that good will boost. b) the revenue of the firm creating that great will boost by 6%. c) the revenue of the firm creating that excellent will certainly decrease by 6%. d) the amount demanded of that good will decrease by 6%. e) None of the above.
7. A 10% boost in the price of movie ticket in Westridge 8 leads to a 15% decrease in the variety of tickets offered, indicating the demand also for movie ticket in Westridge 8 is: a) elastic. b) inelastic. c) unit elastic. d) Can not tell from the information given.
8. If the cross-price elasticity in between two commodities is 1.5, a) the 2 items are luxury goods. b) the 2 goods are complements. c) the 2 items are substitutes. d) the two items are normal items.
True/False/Uncertain. For each of the adhering to statements, say whether it is true, false, or unspecific and also describe your answer.
1. It is reasonable to mean the cross price elasticity of demand for golf clubs and golf balls to be positive.
Golf clubs and also golf balls are complementary goods. This suggests that, as the price of golf clubs increases (a positive change), the consumption of golf balls decreases (an unfavorable change). Cross price elasticity of demand is equal to the ratio of these transforms and also will be negative. The statement is false.
2. If the demand is perfectly elastic, then a shift in the supply curve does not affect the equilibrium price.
|True, bereason a perfectly elastic demand curve is horizontal. As such, no matter what the transition is the equilibrium price will certainly always remain the same. (See graph.)|
3. The demand curve for autos is more elastic than the demand curve for Fords.
False. A Ford deserve to be substituted by a various design. It is not as straightforward to find a substitute for a car in basic. The even more substitutes a good has actually, the more elastic is the demand for that great. Therefore, demand also for Fords is even more elastic. 4. Suppose you own a "Here Comes the Sun" tanning salon and the demand curve for your solutions is downward sloping. More, intend that a brand-new tanning salon referred to as "Sunny Delight" opens up 2 blocks ameans from your salon. Tell whether the adhering to three statements are true, false or unspecific and also explain your answer.
a. The demand curve for your solutions shifts to the ideal. This brand-new salon is a substitute for your solutions. After it has appeared, your consumers have actually more choice, and some of them will certainly begin utilizing the new salon. So the demand also for your solutions will decrease, or transition to the left. The statement is false.
b. The demand for your services becomes more elastic. One of the determinants determining the price elasticity of demand also for the great is the number of substitutes. More substitutes - even more elastic demand also. The statement is true.
c. The cross-price elasticity of the demand for your services through respect to the price charged by "Sunny Delight" is negative. These 2 products (services) are substitutes. The cross-price elasticity of substitutes is positive, considering that as the price of one of them boosts, the demand also for (and therefore the intake of) the other one rises, also. The statement is false.
Short Answer Inquiry. 5. At first Hans Johnkid was the only consumer in the industry for "Casa de Econ" beer, developed by a small regional brewery. When the price of "Casa de Econ" six-pack varies between $10 and $20, the price elasticity of his individual demand also is equal to negative 1. Now imagine that Hans has actually been cloned 4 times, and also currently we have actually 5 similar consumers in the industry for "Casa de Econ". What will occur to the price elasticity of market demand also in the price selection offered above? Will the demand also come to be even more price elastic, much less price elastic, or will certainly elasticity stay the same? Exsimple your answer.
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Due to the fact that elasticity deals with relative changes, it does not matter just how many type of consumers we have in the industry as long as every one of them are very same. (If the amount demanded for each of them changes by 50%, that would mean the quantity demanded in the entire sector will adjust by 50%, as well.) So the price elasticity of demand will stay the same.