Economics Quiz on Chapter 5 & 6

What does the law of demand tell us?

• When prices fall, quantity demanded will fall

• When prices fall, quantity demanded will rise

• When prices fall, quantity demanded will remain the same

• It depends on the situation and type of good

What does price elasticity of demand measure?

• how responsive buyers are to price changes.

• how responsive sellers are to price changes.

• what percentage the quantity demanded will change in response to a 2% price change.

• how stretchy quantity demanded is

When Uber cut the price of a ride in New York City by 15%, it found that the quantity of rides demanded rose by 30%. What is the absolute value of the price elasticity of demand for Uber rides?

• -2

• 2

• 1/2

• -1/2

When is demand is inelastic?

• When the absolute value of the percent change in quantity is smaller than absolute value of the percent change in price

• When the absolute value of the percent change in quantity is larger than absolute value of the percent change in price

The slope of elastic demand curves are relatively 

• steep

• flat

• horizontal

• vertical

Do you think demand is elastic or inelastic for the following good?

1) Flowers on Valentine’s Day

• Elastic

• Inelastic

The _______-price elasticity of demand measures how responsive the quantity demanded of one good is to price changes of another.

cross-price elasticity between complementary goods is ......

• negative

• positive

• bad

• good

Price Elasticity of _________measures by what percent the quantity supplied will increase following a 1% price change

Price elasticity of supply is all about