The price elasticity of demand is defined as the absolute value of the ratio of
Price over quantity demanded.
Change in price over change in quantity demanded.
Percentage change in price over the percentage change in quantity demanded.
Percentage change in quantity demanded over the percentage change in price.
A vertical demand curve has
Unit elasticity
Infinite elasticity
Zero elasticity
Varying elasticity
If the price elasticity of demand for a good is. 75, the demand for the good can be described as:
Normal
Elastic
Inferior
Inelastic
In figure, a unit elastic demand curve is shown by
a
b
c
d
Revenues from the sale of a good will decrease if
Income increases and the good is normal
The price rises and demand is elastic
The price rises and demand is inelastic
Income falls and the good is interior
Demand will be more elastic
The higher the income
The lower the price
The shorter the passage of time after a permanent price increase
The more substitutes available for the good.
The demand will be _____ if there is no change in the demand of the commodity inspite of the change in the price of the commodity.
Perfectly elastic
Perfectly inelastic
A state government wants to increase the taxes on cigarettes to increase tax revenue. This tax would only be effective in raising new tax revenues if the price elasticity of demand is
Unity
For which product is the income elasticity of demand most likely to be negative?
Computer software
Used clothing
Basket balls
Bread
A infinite news paper publisher decides to cut price in order to raise circulation and revenue. This policy is more likely to be successful when demand for the newspaper is which one of the following?
Relatively inelastic
Unit elastic
Relatively elastic
