If the cross-price elasticity between good A & B is negative, we know the goods are:
Correct answer(s):
- Complements
Subject
Managerial Economics
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Quizzes in Managerial Economics
The elasticity which shows the responsiveness of the demand for a good due to changes in the price of a related good is the:
Correct answer(s):
- Cross-price elasticity
We would expect the own price elasticity of demand for food to be:
Correct answer(s):
- Less elastic than the demand for cereal
Demand is more inelastic in the short-term because consumers:
Correct answer(s):
- Have no time to find available substitutes
We would expect the demand for jeans to be:
Correct answer(s):
- More elastic than the demand for clothing
Lemonade, a good with many close substitutes, should have an own-price elasticity that is:
Correct answer(s):
- Relatively elastic
Which of the following factors would not affect the own-price elasticity of a good?
Correct answer(s):
- Price of an input
Suppose QX d = 10,000 – 2 PX + 3 PY – 4.5M , where PX = $100, PY = $50, and M = $2,000. How much of good X is consumed?
Correct answer(s):
- 950 units
Suppose QX d = 10,000 – 2 PX + 3 PY – 4.5M , where PX = $100, PY = $50, and M = $2,000. Then good X has a demand which is:
Correct answer(s):
- Inelastic
Suppose QX d = 10,000 – 2 PX + 3 PY – 4.5M , where PX = $100, PY = $50, and M = $2,000. What is the own-price elasticity of demand?
Correct answer(s):
- -0.21
The demand curve for a good is horizontal when it is:
Correct answer(s):
- A perfectly elastic good
Demand is perfectly elastic when the absolute value of the own price elasticity of demand is:
Correct answer(s):
- Infinite
If a price increase from $5 to $7 causes quantity demanded to fall from 150 to 100, what is the absolute value of the own-price elasticity at a price of $7?
Correct answer(s):
- 1.75
If the absolute value of the own-price elasticity of steak is 0.4, a decrease in price will lead to:
Correct answer(s):
- A reduction in total revenue
The quantity consumed of a good is relatively unresponsive to changes in price whenever demand is:
Correct answer(s):
- Inelastic
If quantity demanded sneakers falls by 10% when price increases 25% we know that the absolute value of the own-price elasticity of sneakers is:
Correct answer(s):
- 0.4
If apples have an own-price elasticity of -1.2 we know the demand is:
Correct answer(s):
- Elastic
The own-price elasticity of demand for apples is -1.2. If the price of apples falls by 5%, what will happen to the quantity of apples demanded?
Correct answer(s):
- It will increase 6%
The demand for good X has been estimated by QX d =12 – 3PX + 4PY. Suppose that good X sells at $2 per unit and good Y sells for $1 per unit. Calculate the own price elasticity.
Correct answer(s):
- -0.3
Suppose the demand for a product is QX d = 10 – lnPX then product X is
Correct answer(s):
- Unitary elastic