Question

ECN 211-TEST #3A-CHPATER 6-ELASTICITY-(45questions) Verma #1 PLEASE DO NOT WRITE ON THE TEST: SCRATCH PAPERS ARE AVAILABLE 1. The price clasticity of demand measures: A. the responsiveness of price to a change in competition B. the change in quantity demanded due to a change in price of a substitute good C the responsiveness of quantity demanded to a change in price D, the change in price due to a change in demand 2. The basic formula for the price elasticity of demand coefficient is: A. absolute decline in quantity demanded/absolute increase in price B. percentage change in quantity demanded/percentage change in price. C. absolute decline in price/absolute increase in quantity demanded. D. percentage change in price/percentage change in quantity demanded J. Even though the price elasticity of demand is always because of the law of demand, by convention its absolute value is always discussed as L A. a fraction; whole number B. positive, negative number C. negative; prime number D, negative; positive number 4. The price of season tickets to a performing arts theater decreases by 3 percent. As a result, the quantity demanded increases by 6 percent. The price elasticity of demand for season tickets is: A. 0.5 B. 9 D. 18 C. 2 5. Blossom, Inc. sells 500 bottles of perfume a month when the price is $7. A huge increase in resource costs forces Blossom to raise price to S9, and the firm only manages to sell 460 bottles of perfume. The price elasticity of demand is: A. 0.33 and elastic B. 3.0 and elastic C. 0.33 and inelastic D. 3.0 and inelastic 6. When the price of a soft drink from the campus vending machine was S0.60 per can, 100 cans were purchased each day. After the price increased to S0.75 per can, sales dropped to 85 cans per day. range, the absolute price clasticity of demand for soft drinks was approximately equal to: A. 0.73. B. 0.15. C. 0.60. Over this D. 1.67