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Chapter 5. Elasticity and Its Applications

Chapter 5. Elasticity and Its Applications - Chapter 5...

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Chapter 5 Elasticity and Its Applications MULTIPLE CHOICE 1. In general, elasticity is a. the friction that develops between buyers and sellers in a market. b. a measure of how much government intervention is prevalent in a market. c. a measure of how competitive a market is. d. a measure of how much buyers and sellers respond to changes in market conditions. 2. When studying how some event or policy affects a market, elasticity provides information on the 3. The most basic tools of economics are 4. The price elasticity of demand measures how responsive 5. The price elasticity of demand measures a. a buyer’s responsiveness to a change in the price of a good. b. the increase in demand as additional buyers enter the market. c. how much more of a good consumers will demand when incomes rise. d. the increase in demand that will occur from a change in one of the nonprice determinants of demand. ANSWER: a. a buyer’s responsiveness to a change in the price of a good. TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 1 RANDOM: Y
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6. The concept of elasticity is used to 7. Demand is said to be elastic if
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