quiz 9

Question 1

It is Judy’s birthday and Jason is casually looking over town for some black balloons to give to Judy as a joke. Most likely, Jason’s price elasticity of demand is

Answer 1

greater than one

Question 2

We would expect the cross-price elasticity between basketballs and golf clubs to be

Answer 2

positive

Question 3

The cross-price elasticity of demand between two goods, X and Y, is positive. From this, we can conclude that goods X and Y are

Answer 3

substitute goods

Question 4

If an auto mechanic raises their price by 10% and then the quantity demanded decreases by 25%, then we say price elasticity of demand is

Answer 4

-2.5…therefore demand is elastic

Question 5

Suppose the price elasticity of demand for a good is 2.49. Then according to the “TRIP Rule”, a decrease in price will ______________ total revenue

Answer 5

increase

Question 6

The cross-price elasticity of demand between baseballs and baseball gloves is expected to be

Answer 6

negative