If demand for a good is price elastic, then the price elasticity will be:
a. equal to one.
b. equal to zero.
c. greater than one.
d. less than one.
e. less than zero.
QUESTION 2Within different price ranges along a linear demand curve, elasticities are:
a. constant.
b. different.
c. equal.
d. the same as slope.
e. negative 1.
QUESTION 3A health club sells 50 memberships when the monthly price is 60 and 70 memberships when the monthly price is 40 . The price elasticity of demand for memberships at this health club is (using the average values method):
a. 0.25.
b. 0.6.
c. 1.0.
d. 1.1.
e. 0.83
QUESTION 4If the price elasticity of demand for football tickets is estimated to be 4.5, then a 10 percent increase in football ticket prices would be expected to cause a:
a. 4.5 percent decrease in quantity demanded.
b. 4.5 percent increase in quantity demanded.
c. 45 percent decrease in quantity demanded.
d. 45 percent increase in quantity demanded.
e. 450 percent increase in quantity demanded
QUESTION 5As price decreases and we move down further along a linear demand curve, the price elasticity of demand will:
a. decrease.
b. increase.
c. stay the same.
d. approach infinity.
e. increase or decrease.
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