Chapter 4 Lesson 3 Quiz

True or False: Demand elasticity is the extent to which a change in price causes a change in the quantity demanded.

• True

• False

True or False: Demand is elastic when a given change in price causes a relatively smaller change in quantity demanded.

• True

• False

True or False: Demand is unit elastic when a given change in price causes a proportional change in quantity demanded.

• True

• False

True or False: To estimate elasticity, add the direction of a price change to the direction of the change in total revenue, or total expenditures.

• True

• False

True or False: The sole determinate of elasticity is the answer to this question: Can the purchase be delayed?

• True

• False

Prices for common vegetables tend to be elastic. Why?

• because other vegetables are available

• because consumers must eat

• because vegetables cannot be substituted

• because vegetables are inexpensive

Which term refers to a changing price that causes a proportional change in total revenue?

• elastic

• unit elastic

• inelastic

• total expenditures

An economist performs a total expenditures test and finds that a change in price and a change in revenue move in opposite directions and concludes that the test shows ________

• demand is inelastic.

• demand is elastic.

• demand is unit elastic.

• there's not enough demand.

For which product is demand likely to be the most elastic?

• a product with no substitutes

• a product with inadequate substitutes

• a product with many adequate substitutes

• it is impossible to tell

To determine elasticity, which question would an economist ask?

• Can the consumer afford the purchase?

• Is the product highly valued by the consumer?

• What portion of the consumer's income is required for the purchase?

• Are there complementary products the consumer might also purchase?