MITBch05

# MITBch05 - CHAPTER 5 1DEMAND AND ELASTICITY TRUE-FALSE...

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162 Chapter 5/Demand and Elasticity 11. Elasticity computations related to demand carry a minus sign to show that the demand curve is  negatively sloped. ANSWER: F, M, R 12. The elasticity formula solves the units problem because percentages are unaffected by the units of  measure. ANSWER: T, E, A 13. The price elasticity of demand measure is generally stated as an absolute value. ANSWER: T, E, R 14. A line that is perfectly elastic has an elasticity of demand of zero. ANSWER: F, M, A 15. Perfectly inelastic demand schedules are vertical. ANSWER: T, M, A 16. Perfectly elastic demand schedules are vertical. ANSWER: F, M, A 17. A vertical demand curve has an elasticity of demand equal to zero. ANSWER: T, M, A 18. A horizontal demand curve is perfectly elastic because a change in price will not induce a change in  quantity demanded. ANSWER: F, D, A 19. A horizontal demand curve is perfectly elastic because a change in price will induce an infinite  change in quantity demanded.
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