3 - 1 Assume that the price elasticity of demand is-2 for a...

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1. Assume that the price elasticity of demand is -2 for a certain firm's product. If the firm raises price, the firm's managers can expect total revenue to: A. Decrease B. Increase C. Remain constant D. Either increase or remain constant depending upon the size of the price increase. 2. A price elasticity of zero corresponds to a demand curve that is: 3. As we move down along a linear demand curve, the price elasticity of demand becomes more 4. Suppose the demand for a product is Q x d = 10 - lnP x then product x is 5. The demand for good X has been estimated by Q x d = 12 - 3P x + 4P y . Suppose that good X sells at $2 per unit and good Y sells for $1 per unit. Calculate the own price elasticity. A. -0.2. B. -0.3. C. -0.5. D. -0.6. 6. The own-price elasticity of demand for apples is -1.2. If the price of apples falls by 5%, what will happen to the quantity of apples demanded? 7. If apples have an own-price elasticity of -1.2 we know the demand is: 8. If quantity demanded for sneakers falls by 10% when price increases 25% we know that the absolute value of the own-price elasticity of sneakers is:
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9. The quantity consumed of a good is relatively unresponsive to changes in price whenever demand is: A. elastic. B. unitary. C. falling. D. inelastic. 10. If the absolute value of the own-price elasticity of steak is 0.4, a decrease in price will lead to: 11. If a price increase from $5 to $7 causes quantity demanded to fall from 150 to 100, what is the absolute value of the own-price elasticity at a price of $7? 12. Demand is perfectly elastic when the absolute value of the own price elasticity of demand is: 13. The demand curve for a good is horizontal when it is: A. a perfectly inelastic good. B. a unitary elastic good. C. a perfectly elastic good. D. an inferior good.
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