Price elasticity of demand is typically negative because
a. as price decreases, quantity demanded decreases
b. as price decreases, quantity demanded increases
c. as price decreases, demand decreases
d. as price decreases, demand increases
e. consumers rarely respond to a change in price
QUESTION 2Price elasticity of demand is defined as
a. the percentage change in price divided by the percentage change in quantity demanded
b. the percentage change in quantity demanded divided by the percentage change in price
c. the change in quantity demanded divided by the change in price
d. the change in price divided by the change in quantity demanded
e. the quantity demanded divided by the price
QUESTION 3The general term elasticity refers to a relationship between
a. quantity demanded and price only
b. quantity supplied and price only
c. quantity supplied or demanded and price only
d. quantity supplied or demanded and anything other than price
e. percentage changes in any two variables
QUESTION 4If a 1 increase in price leads to a 3-unit decrease in quantity demanded, then demand must be elastic.
a. True
b. False
QUESTION 5In calculating price elasticity of demand, which of the following is assumed to be constant?
a. the price of the product itself
b. the quantity demanded of the product
c. total revenue received from the sale of the product
d. the prices of all other products
e. none of the above
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