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
Elastic
Inelastic
Perfectly elastic
It is a case of ______ if demand of the commodity changes with the change in price.
Income elasticity
Price elasticity
Cross elasticity
All the above
Cross elasticity of demand is
Negative for complementary goods
Negative for substitute goods
Unitary for inferior goods
Positive for inferior goods.
If the price elasticity of demand for a good is. 75, the demand for the good can be described as:
Normal
Inferior
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
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
Perfectly inelastic
Unit elastic
Relatively elastic
For which product is the income elasticity of demand most likely to be negative?
Computer software
Used clothing
Basket balls
Bread
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.
Under which one of the following circumstances will the firm have to absorb all the increase in indirect tax itself, being unable to pass on any of it to the consumer?
Perfectly inelastic demand
Perfectly elastic demand
Unit elastic demand
Relatively elastic demand
In case of demand, a slight change in the price will make greater changes in demand
