Question 1
What is meant by unit elastic?
A.
XED mnemonic: Positive substitutes, Negative complements. B.
PED = -1. C.
Positive YED — demand rises as income rises. D.
Positive XED.
Question 2
When calculating PED, put which change on top?
A.
% change in quantity demanded B.
% change in price C.
Total revenue D.
Price level
Question 3
What is meant by xed?
A.
PED between 0 and -1. B.
% change in Qd of A ÷ % change in P of B. C.
PED = -1. D.
Total money from sales; PED determines effect of price changes on TR.
Question 4
What is meant by pes?
A.
% change in Qd of A ÷ % change in P of B. B.
% change in Qs ÷ % change in P. C.
% change in Qd ÷ % change in income. D.
% change in Qd ÷ % change in P — responsiveness of demand to price.
Question 5
What is meant by revenue?
A.
XED mnemonic: Positive substitutes, Negative complements. B.
Total money from sales; PED determines effect of price changes on TR. C.
PED between -1 and -∞ — Qd responsive to price. D.
Negative YED.
Question 6
PED = -2 means demand is:
A.
Elastic B.
Inelastic C.
Perfectly inelastic D.
Unit elastic
Question 7
A negative YED indicates:
A.
A substitute B.
An inferior good C.
A complement D.
A luxury only
Question 8
Party Season Nearly Christmas reminds you that positive XED means:
A.
Substitutes B.
Inferior goods C.
Complements D.
Normal goods only
Question 9
If XED is positive, goods are:
A.
Public goods B.
Substitutes C.
Unrelated D.
Complements
Question 10
With inelastic demand, a price rise will:
A.
Leave TR unchanged always B.
Increase total revenue C.
Decrease total revenue D.
Eliminate demand
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