Microeconomics--Review Questions # 2Student: ________________________________________________________________________1. The price elasticity of demand coefficient measures: A. buyer responsiveness to price changes.B. the extent to which a demand curve shifts as incomes change.C. the slope of the demand curve.D. how far business executives can stretch their fixed costs. 2. The basic formula for the price elasticity of demand coefficient is: 3. Which of the following is not characteristic of the demand for a commodity that is elastic? 4. If the demand for bacon is relatively elastic, a 10 percent decline in the price of bacon will: 5. The price of product X is reduced from $100 to $90 and, as a result, the quantity demanded increases from 50 to 60 units. Therefore demand for X in this price range: A. has declined.B. is of unit elasticity.C. is inelastic.D. is elastic.
6. The price elasticity of demand for beef is about 0.60. Other things equal, this means that a 20 percent increase in the price of beef will cause the quantity of beef demanded to: 7. The concept of price elasticity of demand measures:
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- Spring '14
- Microeconomics, d., B., c.