Question : 41) Demand for a product tends to be more elastic : 1239074

41) Demand for a product tends to be more elastic the longer the time period considered because

A) sellers have more time to expand production.

B) buyers have more time to search for substitutes.

C) price increases over time make the price larger relative to buyers’ incomes.

D) the inverse relationship between the price and the quantity demanded weakens over time.

E) buyers get used to the new price.

42) The long-run price elasticity of demand for electricity is ________ the short-run price elasticity of demand for electricity.

A) greater than

B) less than

C) equal to

D) not comparable to

E) unrelated to

43) A product’s price elasticity of demand is likely to be greater

A) if it only has a few substitutes.

B) if consumers spend a small proportion of income on the product.

C) the less time consumers have to adjust to price changes.

D) if the product is a luxury good rather than a necessity.

E) Both answers C and D are correct.

44) The demand for luxury suites at basketball games is more elastic if

A) these suites are a necessity.

B) these suites are a luxury item.

C) few close substitutes exist for these suites.

D) basketball fans have little time to look for alternative suites.

E) poorer fans cannot afford luxury suites.

45) The demand for a necessity generally is

A) very elastic.

B) infinitely elastic.

C) unaffected by income.

D) inelastic.

E) unit elastic.

46) The demand for necessities generally is ________ the demand for luxury goods.

A) as elastic as

B) more elastic than

C) less elastic than

D) flatter than

E) not comparable to

47) If a good is a necessity, it has ________ substitutes and its demand is ________.

A) poor; elastic

B) poor; inelastic

C) many; elastic

D) many; inelastic

E) many; precisely unit elastic

48) You are more sensitive to a change in price if you

A) spend a lot of your income on the good.

B) spend a small percentage of your income on the good.

C) buy very little of the good.

D) do not buy the good regularly.

E) have a very inelastic demand for the good.

49) We calculate the price elasticity of demand as the

A) ratio of the percentage change in the quantity demanded to the percentage change in price.

B) change in quantity divided by the change in price.

C) ratio of the percentage change in the price to the percentage change in quantity.

D) percentage change in the quantity demanded divided by the percentage change in income.

E) equilibrium quantity divided by the equilibrium price.

50) What is the formula for the price elasticity of demand? The percentage change in the

A) quantity demanded divided by the percentage change in the price of a substitute or complement.

B) quantity supplied divided by the percentage change in price.

C) quantity demanded divided by the percentage change in price.

D) quantity demanded divided by the percentage change in income.

E) equilibrium quantity demanded divided by the equilibrium price.