If demand is price elastic, total revenue is
a. directly related to quantity demanded
b. inversely related to quantity demanded
c. directly related to price
d. directly related to price and inversely related to quantity demanded
e. not related to either price or to quantity demanded
QUESTION 2John spends exactly the same dollar amount on candy bars each week, regardless of their price. John's demand curve for candy bars is
a. upward-sloping
b. backward-bending
c. perfectly inelastic
d. perfectly elastic
e. unit elastic
QUESTION 3If a price reduction leads to larger total revenue, demand is
a. perfectly inelastic
b. inelastic
c. unit elastic
d. elastic
e. perfectly elastic
QUESTION 4If a firm raises the price of its product, its total revenue will
a. always increase
b. increase only if demand is price inelastic
c. increase only if demand is price elastic
d. remain constant, regardless of price elasticity of demand
e. never increase
QUESTION 5The price elasticity of demand
a. is of no use to producers
b. tells producers what will happen to total profit if they change product price
c. tells producers what will happen to quantity supplied if they change product price
d. tells producers what will happen to total revenue if they change product price
e. tells producers what will happen to price in the following time period
QUESTION 6Suppose that you allow yourself 50 per month to spend on compact disks. You spend exactly this much every month regardless of the price of compact disks. Therefore, your demand for CDs
a. is elastic
b. is inelastic
c. is unit elastic
d. cannot be characterized unless we know the price of a disk
e. cannot be characterized unless we know the price and quantity of compact disks purchased
Quick Reply
