Quiz 3

Question 1

If you think good wine is a necessity but cheese is a luxury, then your demand for wine will be more ____ than your demand for cheese:

Answer 1

inelastic

Question 2

Income elasticity of demand measures how:

Answer 2

the quantity demanded changes as consumer income changes

Question 3

If the quantity supplied responds only slightly to changes in price, then:

Answer 3

supply is said to be inelastic

Question 4

If sellers respond substantially to changes in the price, then:

Answer 4

sellers are considered to be relatively price sensitive

Question 5

Holding all other forces constant, if raising the price of a good results in less total revenue, the demand for the good must be:

Answer 5

elastic

Question 6

A person who likes to be on the sea in a boat would tend to have what type of demand for boats?

Answer 6

inelastic

Question 7

If a change in the price of a good results in no change in total revenue:

Answer 7

the demand for the good must be unit elastic

Question 8

A given leftward shift in the supply curve of product X will increase equilibrium price to a greater extent, the:

Answer 8

more inelastic the demand for the product

Question 9

In graph showing elasticity
top is-
middle is-
bottom is-

Answer 9

elastic
unit elastic
inelastic

Question 10

Long run supply curve is likely

Answer 10

perfectly elastic

Question 11

If the demand for illegal drugs is inelastic, drug education campaigns should:

Answer 11

reduce both drug use and drug-related crime

Question 12

If the demand curve is linear and downward-sloping, which of the following would NOT be correct?

Answer 12

elasticity and slope will both remain constant along the curve