Elasticity of Demand and Supply Coefficients- Micro Topic 2.4 and 2.5

The video tutorial covers the concept of elasticity in microeconomics, focusing on demand and supply elasticity, cross-price elasticity, and income elasticity. It explains how changes in price and income affect the quantity demanded or supplied, and distinguishes between elastic and inelastic responses. The tutorial also discusses the elasticity coefficient and its implications for understanding market behavior.

What happens to the quantity demanded when the price of a product with inelastic demand increases significantly?

• It remains unchanged.

• It decreases slightly.

• It increases significantly.

• It decreases significantly.

If a 10% increase in price leads to a 10% decrease in quantity demanded, what type of elasticity is this?

• Unit elastic

• Inelastic

• Perfectly elastic

• Perfectly inelastic

Which of the following describes a perfectly inelastic demand curve?

• Vertical line

• Downward sloping but flat

• 45-degree angle

• Horizontal line

What characterizes an inelastic supply curve?

• A horizontal supply curve

• A flat supply curve

• A small change in quantity with a large change in price

• A large change in quantity with a small change in price

How does the supply of Super Bowl t-shirts respond to a price increase?

• Supply decreases significantly.

• Supply remains unchanged.

• Supply increases significantly.

• Supply decreases slightly.

If the price of cereal increases and the demand for milk decreases, what is the relationship between these two goods?

• They are inferior goods.

• They are unrelated.

• They are complements.

• They are substitutes.

What does a positive income elasticity indicate about a good?

• It is an inferior good.

• It is a normal good.

• It is a complementary good.

• It is a substitute good.