For which product is the income elasticity of demand most likely to be negative?
Computer software
Used clothing
Basket balls
Bread
If the price elasticity of demand for a good is. 75, the demand for the good can be described as:
Normal
Elastic
Inferior
Inelastic
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
In case of demand, a slight change in the price will make greater changes in demand
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.
In figure, a unit elastic demand curve is shown by
a
b
c
d
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 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
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
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
