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
If the price elasticity of demand for a good is. 75, the demand for the good can be described as:
Normal
Inferior
In case of demand, a slight change in the price will make greater changes in demand
Perfectly inelastic
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
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
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.
If demand is price elastic, then:
A rise in price will raise total revenue
A fall in price will raise total revenue
A fall in price will lower the quantity demanded.
A rise in price won't have any effect on total revenues.
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.
For which product is the income elasticity of demand most likely to be negative?
Computer software
Used clothing
Basket balls
Bread
