If the demand curve is unit elastic, this implies that:

If the demand curve is unit elastic, this implies that:
 a. consumers do not react to a change in product price.
  b. the good can only be purchased in units of 1.
  c. this good has no good substitutes.
  d. the good is a basic food staple.
  e. the percentage change in the quantity demanded = the percentage change in product price.

QUESTION 2

If the demand curve over a certain range is price elastic, this implies that the:
 a. percentage change in the quantity demanded exceeds one.
  b. percentage change in the quantity demanded exceeds the percentage change in product price.
  c. percentage change in price exceeds the percentage change in quantity demanded.
  d. product is non-reactive.
  e. product has no good substitute.

QUESTION 3

If demand price elasticity measures 2, this implies that consumers would:
 a. buy twice as much of the product if the price drops 10 percent.
  b. require a 2 percent drop in price to increase their purchases by 1 percent.
  c. buy 2 percent more of the product in response to a 1 percent drop in price.
  d. require at least a 2 increase in price before showing any response to the price increase.
  e. buy twice as much of the product if the price drops 1 percent.

QUESTION 4

Demand price elasticity measures:
 a. how much supply will change as price changes.
  b. how consumers change their purchases in response to a change in income.
  c. how consumers change their purchases in response to a change in the price of a substitute good.
  d. how consumers change their purchases in response to a change in the price of a product.
  e. the change in price brought about by a change in consumer demand.

QUESTION 5

If the price elasticity of demand is computed for two products, and product A measures .79, and product B measures 1.6, then:
 a. product A is more price elastic than product B.
  b. product B is more price elastic than product A.
  c. consumers are more sensitive to price changes in product A than in product B.
  d. product B is more price inelastic than product A.
  e. products A and B must be substitutes.

QUESTION 6

The president of Tucker Motors says, Lowering the price won't sell a single additional Tucker car. The president believes that the price elasticity of demand is:
 a. perfectly elastic.
  b. perfectly inelastic.
  c. unitary elastic.
  d. elastic.
  e. inelastic.