A 10 percent rise in the price of housing reduces the quantity demanded of housing by 3 percent. We can conclude that the demand for housing is:
a. inelastic.
b. elastic.
c. unitary elastic.
d. perfectly elastic.
QUESTION 2You are on a campus committee which sets the ticket prices for basketball games. The committee wants to increase the total money generated from ticket sales. When should the committee choose to lower its ticket prices?
a. Always.
b. Never.
c. When demand for basketball tickets is elastic.
d. When demand for basketball tickets is inelastic.
QUESTION 3A demand curve that has constant price elasticity of demand coefficient equals to one at all points is a(n):
a. rectangular hyperbola.
b. downward-sloping straight line.
c. upward-sloping straight line.
d. none of these.
QUESTION 4A perfectly elastic demand curve has a price elasticity of demand coefficient of:
a. zero.
b. 1.
c. greater than 1, but less than infinity.
d. less than 1, but greater than zero.
e. infinity.
QUESTION 5Any change in price along a perfectly inelastic demand curve produces:
a. greater change in the quantity demanded.
b. less change in the quantity demanded.
c. no change in the quantity demanded.
d. infinite change in the quantity demanded.
QUESTION 6Suppose there is no change in total revenue when the price changes. The demand curve for this good is:
a. perfectly elastic.
b. perfectly inelastic.
c. elastic.
d. inelastic.
e. unitary elastic.
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