Elasticity

Question 1

What is elasticity?

Answer 1

big response to a price change

Question 2

What is inelasticity?

Answer 2

little response to a price change

Question 3

What is elasticity? (Number)

Answer 3

any number greater than 1

Question 4

What is inelasticity? (Number)

Answer 4

any number less than 1

Question 5

The more substitutes a good has, the more ___ is its demand

Answer 5

Elastic

Question 6

Necessities are more price ____

Answer 6

inelastic

Question 7

Narrowly defined markets have more ____ demand than broadly defined markets

Answer 7

elastic

Question 8

Goods tend to have more _____ demand over longer time horizons

Answer 8

elastic

Question 9

When Demand is elastic a percentage rise in price brings a ______ percentage fall in quantity demanded. Total revenue ____

Answer 9

greater, falls

Question 10

If demand is _____, a price change leaves total revenue unchanged.

Answer 10

unit elastic

Question 11

If Demand is inelastic, a percentage rise in price brings a ____ percentage fall in quantity demanded. Total revenue ___

Answer 11

smaller, rises

Question 12

Netflix is one of the largest video streaming services. If netflix increases its average flat rate by 10 percent and its total revenue increases, then the demand for Netflix subscriptions is ____

Answer 12

price inelastic

Question 13

Lowering the price is a good idea if Demand is ____: Total Revenue will increase.

Answer 13

Elastic

Question 14

Raising the price is a good idea if Demand is ____: Total Revenue will increase.

Answer 14

Inelastic

Question 15

For complements, the ____ elasticity is ___

Answer 15

cross-price, negative

Question 15

For substitutes, the _____ elasticity is _____

Answer 15

cross-price, positive

Question 16

For normal goods, the ______ elasticity is ____

Answer 16

income-price, positive

Question 17

For inferior goods, the _____ elasticity is _____

Answer 17

income-price, negative

Question 18

An increase in supply has a bigger impact on PRICE when DEMAND is _____

Answer 18

Inelastic

Question 19

An increase in supply has a bigger impact on QUANTITY when DEMAND is ____

Answer 19

Elastic

Question 20

An increase in demand has a bigger impact on PRICE when SUPPLY is ____

Answer 20

inelastic

Question 21

An increase in demand has a bigger impact on QUANTITY when SUPPLY is ____

Answer 21

elastic