Homework Answers
False, Price elasticity of 1.5 does not indicate that the good is necessarily luxury good. Luxury goods have a high elasticity of demand because they are sensitive to price changes.
A diabetic's demand for insulin will have a perfectly Inelastic demand since it is a necessity.
A wide variety of substitutes are available for the good will result in higher absolute value of the price elasticity of demand for a product..
The only statement which is true is The more narrowly we define a market, the more elastic the demand for a product will be. Narrowly defined market tend to have more elastic demand than broadly defined market because it is easier to find close substitute for narrowly defined market.
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The absolute value of the price elasticity of demand for telescopes is 1.5. Therefore, telescopes can be classif...
Which of the following statements about the price elasticity of demand is correct?
Question 5 Which of the following statements about the price elasticity of demand is correct? The absolute value of the elasticity of demand ranges from zero to one. The elasticity of demand for a good in general is equal to the elasticity of demand for a specific brand of the good. Demand is more elastic the smaller the percentage of the consumer's budget the item takes up. Demand is more elastic in the long run than it is in the short run. Question 6 The cross-price elasticity...
Question 9 Which of the following statements is true? The demand curve for a necessity is...
Question 9 Which of the following statements is true? The demand curve for a necessity is more elastic than the demand curve for a luxury. The more time that passes the more inelastic the demand for a product becomes. The more narrowly we define a market, the more elastic the demand for a product will be. In general, if a product has few substitutes it will have an elastic demand. OOOO Question 10 The income elasticity of demand measures the...
Question 13 The absolute value of the price elasticity of demand for telescopes is 1.5. Therefore,...
Question 13 The absolute value of the price elasticity of demand for telescopes is 1.5. Therefore, telescopes can be classified as a luxury. True False
Question 15 Of the following, which is the best example of good with a perfectly inelastic...
Question 15 Of the following, which is the best example of good with a perfectly inelastic demand? a diabetic's demand for insulin the demand for tickets in New York City when the Mets or Yankees are in the World Series the demand for gasoline the demand for a college education by a student who has a full scholarship to an ivy League school
Question 15 of the following, which is the best example of good with a perfectly inelastic...
Question 15 of the following, which is the best example of good with a perfectly inelastic demand? a diabetic's demand for insulin the demand for tickets in New York City when the Mets or Yankees are in the World Series the demand for gasoline the demand for a college education by a student who has a full scholarship to an Ivy League school
Question 11 Which of the following statements is true? The demand curve for a necessity is...
Question 11 Which of the following statements is true? The demand curve for a necessity is more elastic than the demand curve for a luxury ore narrowly we define a market, the more elastic the demand for a product will be In general, if a product has few substitutes it will have an elastic demand. The more time that passes the more inelastic the demand for a product becomes
Question 12 Which of the following would result in a higher absolute value of the price elasticity of demand for a...
Question 12 Which of the following would result in a higher absolute value of the price elasticity of demand for a product? The expenditure on the good is small relative to one's budget. The good is a necessity. The time period under consideration is short. A wide variety of substitutes are available for the good.
Price elasticity of demand for a product is likely to be greater the smaller the proportion...
Price elasticity of demand for a product is likely to be greater the smaller the proportion of one`s incomes is spent on the good the greater the amount of time passes the fewer the number of substitutes if the product is a necessity rather than a luxury The demands for such products as salt and electricity tend to be: perfectly price elastic. relatively price inelastic. relatively price elastic. of unit price elasticity.
5. Determinants of the price elasticity of demand Consider some determinants of the price elasticity of...
5. Determinants of the price elasticity of demand
Consider some determinants of the price elasticity of
demand:
• The availability of close substitutes
• Whether the good is a necessity or a luxury
• How broadly you define the market
• The time horizon being considered
A good with many close substitutes is likely to have relatively
__(Elastic, Inelastic)___ demand since consumers can easily choose
to purchase one of the close substitutes if the price of the good
rises.
A...
Suppose that the price elasticity of demand of a good is -3. Its demand is _________...
Suppose that the price elasticity of demand of a good is -3. Its demand is _________ and the percentage change in its quantity demanded is ________ than the percentage change in its price. A. Elastic: Smaller B. Elastic: Greater C. Inelastic: Smaller D. Inelastic: Greater Which of the following is not a determinant of the price elasticity of demand? A. Availability of substitutes B. Degree of necessity C. Cost relative to income D. Availability of inputs With a(n) ______ demand,...
Question 9 Which of the following statements is true? The demand curve for a necessity is more elastic than the demand curve for a luxury. The more time that passes the more inelastic the demand for a product becomes. The more narrowly we define a market, the more elastic the demand for a product will be. In general, if a product has few substitutes it will have an elastic demand. OOOO Question 10 The income elasticity of demand measures the...
Question 13 The absolute value of the price elasticity of demand for telescopes is 1.5. Therefore, telescopes can be classified as a luxury. True False
Question 15 Of the following, which is the best example of good with a perfectly inelastic demand? a diabetic's demand for insulin the demand for tickets in New York City when the Mets or Yankees are in the World Series the demand for gasoline the demand for a college education by a student who has a full scholarship to an ivy League school
Question 15 of the following, which is the best example of good with a perfectly inelastic demand? a diabetic's demand for insulin the demand for tickets in New York City when the Mets or Yankees are in the World Series the demand for gasoline the demand for a college education by a student who has a full scholarship to an Ivy League school
Question 11 Which of the following statements is true? The demand curve for a necessity is more elastic than the demand curve for a luxury ore narrowly we define a market, the more elastic the demand for a product will be In general, if a product has few substitutes it will have an elastic demand. The more time that passes the more inelastic the demand for a product becomes
Question 12 Which of the following would result in a higher absolute value of the price elasticity of demand for a product? The expenditure on the good is small relative to one's budget. The good is a necessity. The time period under consideration is short. A wide variety of substitutes are available for the good.
5. Determinants of the price elasticity of demand
Consider some determinants of the price elasticity of
demand:
• The availability of close substitutes
• Whether the good is a necessity or a luxury
• How broadly you define the market
• The time horizon being considered
A good with many close substitutes is likely to have relatively
__(Elastic, Inelastic)___ demand since consumers can easily choose
to purchase one of the close substitutes if the price of the good
rises.
A...
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