Question

Multiple Choice

QUESTION 13

A brand of dress shoes was put on sale for 20% off. This led to an increase of sale by 15%. The price elasticity of demand for this product is

	1.	relatively elastic
	2.	relatively inelastic
	3.	unitary elastic
	4.	perfectly inelastic

QUESTION 14

The concept of cross-price elasticity is used to examine the responsiveness of demand

	1.	to changes in income
	2.	for one product to changes in the price of another
	3.	to changes in "own" price
	4.	to changes in income

QUESTION 15

if the cross-price elasticity E_x,y =3

	1.	demand of y rises by 3% with a 1% increase in the price of X
	2.	the quantity demanded of X rises by 3% with a 1% decrease in the price of X
	3.	the quantity demanded of y rises by 1% with a 3% increase in the price of y
	4.	demand of both x and y rises by 1% with a 3% decrease in the price of either x or y

QUESTION 16

With elastic demand, a price increase will

	1.	lower marginal revenue
	2.	lower total revenue
	3.	increase total revenue
	4.	lower marginal and total revenue

QUESTION 17

A direct relation between the price of one product and the demand for another holds for all

	1.	complements
	2.	substitutes
	3.	normal goods
	4.	inferior goods