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ECON 705 Module 2 /35 Questions And Answers 100% Score!!!!
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- ECON 705 Module 2 /35 Questions And Answers 100%
ECON 705 Module 2 /35 Questions And Answers 100% Score!!!!
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ECON 705 Module 2 /35 Questions And Answers100% Score!!!!
Quiz :1. If the price decreases by 4 percent. As a result, the quantity demanded
increases by 12 percent. The price elasticity of demand is - Answer :12%/-4%=-
3% Change in % Quantity demanded/change in % Price, Greater than 1 is
elastic, less than 1 is inelastic, equal to 1 is unit elasticity
Quiz :2. What is the relationship between elasticity and revenue -
Answer :When the price changes, consumers demand changes based on the
price change. The response could be very dramatic (elastic) or not very
responsive to change in price (inelastic). When demand is elastic, the
relationship between price and revenue will be in the opposite direction. In
elastic cases greater than one, when price increases elasticity, revenue
decreases. When demand is inelastic, less than one, and price goes up,
revenue goes up. Unit elasticity, no change for revenue.
Quiz :3. A 7 percent reduction in the price of a product has zero effect on the
dollar amount of consumer expenditure on the product. The price elasticity of
demand is - Answer :one, unit elastic.
Quiz :4. What does the price elasticity of demand coefficient measure -
Answer :the responsivity of consumers with regards to any price change
Quiz :5. define the price elasticity of demand - Answer :the responsiveness of
the quantity demanded of a product or service when its price is changed by
one unit. The nature of the price elasticity of demand can be elastic, inelastic,
or unit elastic.
Quiz :6. What is characteristic of the demand for a commodity that is elastic -
Answer :many substitutes, competitive markets, high percentage of income,
bought frequently
Quiz :7. What is characteristic of the demand for a commodity that is inelastic
- Answer :no substitutes, little competition, bought infrequently, small % of
income, short-run, location
Quiz :8. What is unit elastic - Answer :The elasticity of demand is always one,
regardless of price change.
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