ECON 2102 Test 2 Questions and Correct Verified
Answers
The price elasticity of demand for newspapers is .34. What would be the consequence of a 2%
decrease in the price of newspapers? - ✔✔Quantity demanded would increase by .68%
Suppose that the price of T-shirts increased from $10 to $20. In response, quantity
demanded declined from 100 cases/month to 80 cases/month. The price elasticity of demand is
equal to: ________. - ✔✔.33
A perfectly inelastic demand curve: - ✔✔is vertical
Above the midpoint on a linear demand curve: - ✔✔elasticity of demand > 1.
Total revenue will increase if price: - ✔✔rises and demand is inelastic
In general, demand is less elastic when: - ✔✔there are no good substitutes available
When income elasticity of demand is negative, one can correctly conclude that: - ✔✔the good
is inferior.
When the price of good R fell from $8 to $6, the demand for good T increased from 10
units to 20 units. Nothing else changed. Cross elasticity of demand equals _______. - ✔✔-
2.33
An increase in the price of good X caused the demand for good Y to decrease. - ✔✔Cross
elasticity is negative because the two goods are complements
Which of the following would be most useful in predicting the impact of a recession on the
demand for air travel? - ✔✔Income elasticity of demand for air travel
Answers
The price elasticity of demand for newspapers is .34. What would be the consequence of a 2%
decrease in the price of newspapers? - ✔✔Quantity demanded would increase by .68%
Suppose that the price of T-shirts increased from $10 to $20. In response, quantity
demanded declined from 100 cases/month to 80 cases/month. The price elasticity of demand is
equal to: ________. - ✔✔.33
A perfectly inelastic demand curve: - ✔✔is vertical
Above the midpoint on a linear demand curve: - ✔✔elasticity of demand > 1.
Total revenue will increase if price: - ✔✔rises and demand is inelastic
In general, demand is less elastic when: - ✔✔there are no good substitutes available
When income elasticity of demand is negative, one can correctly conclude that: - ✔✔the good
is inferior.
When the price of good R fell from $8 to $6, the demand for good T increased from 10
units to 20 units. Nothing else changed. Cross elasticity of demand equals _______. - ✔✔-
2.33
An increase in the price of good X caused the demand for good Y to decrease. - ✔✔Cross
elasticity is negative because the two goods are complements
Which of the following would be most useful in predicting the impact of a recession on the
demand for air travel? - ✔✔Income elasticity of demand for air travel
