ECON 210 - Quiz 9 Questions. Answers Provided. Complete Solutions.

Quiz 9
Question 1
If the price of good X falls and the demand for good X is unit elastic, then the
percentage rise in quantity demanded is __________ the percentage fall in
price, and total revenue __________.

greater than; falls

less than; falls

greater than; rises

equal to; remains constant

less than; rises
Question 2
If the percentage change in quantity demanded is less than the percentage
change in price for good Y, then the demand for good Y is

elastic.

inelastic.

unit elastic.

perfectly elastic.
Question 3
A good will tend to have a low-price elasticity of demand if

a person has a long period of time to adjust to price changes.

the good is a luxury.

a person spends a high percentage of his or her budget on the good.rrect!

the good has few substitutes.
Question 4
If the cross elasticity of demand for good A with respect to good B is +2.7,
then good A is

an inferior good.

a normal good.

, a complement to good B.

a substitute for good B.
Question 5
The price elasticity of demand for a given good is 2.3. This implies that if
price

falls by 10 percent, quantity demanded falls 2.3 percent.

rises by 10 percent, quantity demanded falls 2.3 percent.

rises by 2.3 percent, quantity demanded falls 2.3 percent.

none of the above
!
rises by 20 percent, quantity demanded falls 46 percent.
Question 6
Demand for a given good is inelastic, so it follows that if price rises,
__________ will rise, too.

total cost

income

total revenue

supply

quantity demanded
Question 7
As the price of good X rises from $1.50 to $1.75 the result is a decrease in
the quantity demanded of good X from 650 units to 590 units. The price
elasticity of demand for good X is _____________ and total revenue __________
as the price of good X rises from $1.50 to $1.75.
Correct!

0.63; rises

0.63; falls

1.59; rises

1.59; falls
Question 8
Income elasticity of demand for an inferior good is