Question 17

Suppose that the demand for a product along a linear demand curve is price elastic. A decrease in price will result in a(n) __________ in output and a(n) __________ total revenue.

Answer a. decrease; decrease

b. increase; increase

c. decrease; increase

d. increase; decrease

e. Cannot be determined without knowing the price or the quantity demanded.

.

Question 18

Suppose that the demand for a product along a linear demand curve is price inelastic. An increase in price will result in a(n) __________ in output and a(n) __________ total revenue.

Answer a. decrease; decrease

b. increase; increase

c. decrease; increase

d. increase; decrease

e. Cannot be determined without knowing the price or the quantity demanded.

.

Question 19

Occidental College raised tuition by 15 percent and the number of enrolled credit-hours declined by 5 percent. We can conclude from this that the demand for an Occidental education is:

Answer a. unit elastic.

b. price elastic.

c. price inelastic.

d. perfectly elastic.

e. perfectly inelastic

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