Multiple an option questions.

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1.The price elasticity of need is: a) the ratio of the percentage change in quantity demanded come the percentage readjust in price. b) the responsiveness the revenue come a change in quantity. C) the ratio of the change in quantity demanded split by the readjust in price. D) the response of revenue to a readjust in price.

2.If demand is price elastic, then: a) a rise in price will raise full revenue. B) a autumn in price will certainly raise complete revenue. c) a fall in price will lower the quantity demanded. D) a increase in price won"t have any type of effect on total revenues.

3. Complementary products have: a) the exact same elasticities the demand. B) an extremely low price elasticities of demand. C) an adverse cross price elasticities of need with respect to every other. d) positive income elasticities of demand.

4. The price elasticity of need generally has tendency to be: a) smaller sized in the long run 보다 in the short run. B) smaller in the brief run 보다 in the lengthy run. c) bigger in the quick run than in the lengthy run. D) unrelated to the length of time.

5. If the price elasticity of it is provided of doodads is 0.60 and also the price increases by 3 percent, climate the quantity provided of doodads will increase by a) 0.60 percent. B) 0.20 percent c) 1.8 percent d) 18 percent.

6. Intend we recognize that the price elasticity of need of an excellent X is equal to -1.2. Then, if its price will increase by 5%, we deserve to predict through certainty the a) quantity demanded the that great will increase. B) the revenue of the firm creating that great will rise by 6%. C) the revenue that the firm creating that good will diminish by 6%. D) the quantity demanded of that good will to decrease by 6%. e) none of the above.

7. A 10% rise in the price the movie ticket in Westridge 8 leader to a 15% diminish in the variety of tickets sold, describe the need for movie ticket in Westridge 8 is: a) elastic. b) inelastic. C) unit elastic. D) can not tell native the info given.

8. If the cross-price elasticity between two assets is 1.5, a) the two products are deluxe goods. B) the two goods are complements. C) the two products are substitutes. d) the two goods are typical goods.

True/False/Uncertain. for each the the complying with statements, say whether it is true, false, or uncertain and explain her answer.

1. The is reasonable to intend the cross price elasticity of demand for golf clubs and also golf balls to it is in positive.

Golf clubs and golf balls are complementary goods. This way that, together the price the golf clubs boosts (a confident change), the consumption of golf balls reduce (a negative change). Cross price elasticity of need is same to the proportion of this changes and also will be negative. The statement is false.

2. If the need is perfectly elastic, climate a shift in the supply curve does not impact the equilibrium price.

True, since a perfectly elastic demand curve is horizontal. Therefore, no issue what the transition is the equilibrium price will constantly remain the same. (See graph.)

3. The need curve for autos is an ext elastic 보다 the demand curve for Fords.

False. A Ford have the right to be substituted through a different model. It is not as basic to uncover a substitute for a automobile in general. The an ext substitutes a good has, the an ext elastic is the need for that good. Therefore, demand for Fords is more elastic. 4. Suppose you very own a "Here comes the Sun" demorphs salon and the demand curve because that your services is downward sloping. Further, suppose that a new tanning salon dubbed "Sunny Delight" opens up two blocks away from her salon. Tell even if it is the adhering to three statements space true, false or uncertain and explain her answer.

a. The need curve because that your solutions shifts come the right. This brand-new salon is a substitute for her services. After ~ it has appeared, your consumers have an ext choice, and also some of castle will start using the brand-new salon. For this reason the demand for your services will decrease, or shift to the left. The declare is false.

b. The need for your solutions becomes more elastic. Among the components determining the price elasticity of demand for the an excellent is the variety of substitutes. More substitutes - much more elastic demand. The statement is true.

c. The cross-price elasticity the the demand for your services with respect come the price fee by "Sunny Delight" is negative. This two products (services) room substitutes. The cross-price elasticity that substitutes is positive, because as the price of among them increases, the demand for (and as such the usage of) the various other one increases, too. The declare is false.

Short answer Question. 5. Originally Hans Johnson to be the only consumer in the sector for "Casa de Econ" beer, developed by a tiny local brewery. As soon as the price of "Casa de Econ" six-pack varies in between $10 and also $20, the price elasticity that his individual demand is same to an unfavorable 1. Currently imagine the Hans has been cloned 4 times, and also now we have actually 5 similar consumers in the market for "Casa de Econ". What will happen to the price elasticity of market need in the price range given above? will certainly the demand become much more price elastic, less price elastic, or will elasticity remain the same? define your answer.

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Since elasticity encounters relative changes, it doesn"t issue how plenty of consumers we have actually in the market as long as all of them room same. (If the quantity demanded for each that them transforms by 50%, the would average the quantity demanded in the whole market will readjust by 50%, too.) for this reason the price elasticity of need will remain the same.