In figure, a unit elastic demand curve is shown by
a
b
c
d
For which product is the income elasticity of demand most likely to be negative?
Computer software
Used clothing
Basket balls
Bread
If a good is a luxury, its income elasticity of demand is.
Positive and less than 1
Negative but greater than 1
Positive and greater than 1
Zero
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
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 price elasticity of demand generally tends to be:
Smaller in the long tun than in the shot run
Smaller in the short run than in the long run
Un related to the length of time
Larger in the short run than in the long run.
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
Change in the demand of a commodity due to change in the price of the substitute is an example of
In case of demand, a slight change in the price will make greater changes in demand
Perfectly inelastic
Cross elasticity of demand is
Negative for complementary goods
Negative for substitute goods
Unitary for inferior goods
Positive for inferior goods.
