Question : 21) If a good has a price elasticity of demand : 1377352

21) If a good has a price elasticity of demand equal to 0, ________.

A) the percentage change in quantity demanded for the good will be greater than the percentage change in its price

B) the demand curve of the good is upward sloping

C) the smallest increase in its price causes consumers to stop consuming it completely

D) the quantity demanded is completely unaffected by a change in its price

22) If the value of price elasticity of demand for a good is equal to “∞”, it implies that the good has a ________ demand.

A) perfectly elastic

B) perfectly inelastic

C) unit elastic

D) relatively inelastic

23) Sandra consumes two goods–tea and coffee. Her demand for tea is inelastic while her demand for coffee is elastic. If there is an increase in the price of both tea and coffee, ________.

A) Sandra’s expenditure on both tea and coffee is likely to increase

B) Sandra’s revenue on both tea and coffee is likely to decrease

C) Sandra’s expenditure on tea will increase and her expenditure on coffee will decrease

D) Sandra’s expenditure on coffee will increase and her expenditure on tea will decrease

24) Which of the following best describes a good with perfectly elastic demand?

A) For a given price change, the percentage change in quantity demanded will be less than the percentage change in its price.

B) The demand curve for the good initially slopes upward, reaches its maximum, and then slopes downward.

C) Even the smallest increase in the price of the good will cause consumers to stop consuming it completely.

D) The quantity demanded of the good is completely unaffected by a price change.

25) In case of a linear negatively sloped demand curve, the price elasticity of demand:

A) is zero between any two points on the curve.

B) is the same between any two points on the curve.

C) is different at different points on the curve.

D) is equal to the slope between different points on the demand curve.

26) At the midpoint of a linear demand curve, the price elasticity of demand is:

A) equal to zero.

B) between zero and one.

C) equal to one.

D) greater than one.

27) At all the points below the midpoint on a linear demand curve, the value of price elasticity ofdemand is:

A) zero.

B) greater than one.

C) less than one.

D) equal to one.

28) At all the points above the midpoint on a linear demand curve, the value of price elasticity ofdemand is:

A) equal to one.

B) zero.

C) greater than one.

D) less than one.

29) Which of the following statements correctly differentiates between the slope of the demand curve and price elasticity of demand along a linear demand curve?

A) The price elasticity of demand for a good is the same at different points on the demand curve, whereas the slope of the demand curve varies depending on the point where it is measured.

B) The price elasticity of demand for a good varies along the demand curve, whereas the slope of the demand curve remains same at different points on the curve.

C) The price elasticity of demand is a ratio, whereas the slope of a demand curve is a product.

D) The price elasticity of demand is a product, whereas the slope of a demand curve is a ratio.

30) If a good has a price elasticity of demand of -3, it implies that:

A) if the income of the consumer increases by 3%, the quantity demanded of that good will increase by 1%.

B) if the income of the consumer increases by 1%, the quantity demanded of that good will increase by 3%.

C) if the price of the good increases by 1%, the quantity demanded of the good will decrease by 3%.

D) if the price of the good increases by 3%, the quantity demanded of the good will increase by 1%.