Chapter 6 example #66434

Total revenue falls as the price of a good is raised, if the demand for the good is: Inelastic Unitary elastic Perfectly elastic Elastic

If the demand for a product is elastic, then: A higher tax on the product will generate more tax revenue Total revenue will decrease as price decreases A higher tax on the product will generate less tax revenue Total revenue will remain constant as price increases

Refer to the above graphs. Which graph depicts a situation where sellers are increasing their output because their product is becoming more popular among buyers? Graph B Graph C Graph D Graph A

Most goods can be classified as normal goods rather than inferior goods. The definition of a normal good suggests that: The income elasticity of demand for the good is negative The price elasticity of demand for the good is negative The cross elasticity of demand for the good is positive The income elasticity for the good is greater than 0

The Law of Supply suggests that the price-elasticity of supply is: Always less than 1 Positive Always greater than 1 Negative

If a 10 percent increase in the price of one good results in no change in the quantity demanded of another good, then it can be concluded that the two goods are: Substitute goods Normal goods Independent goods Complementary goods

The price elasticity of demand increases with the length of the period considered because: The demand curve will shift outward as time passes Consumers' incomes will increase over time Consumers will be better able to find substitutes All prices will increase over time

Refer to the graph above. Which demand curve is perfectly inelastic? D3 D2 D5 D4

Refer to the graphs above. Which one shows a perfectly elastic demand? Graph C Graph A Graph D Graph B

Demand is said to be inelastic when: A reduction in price results in an increase in total revenue A reduction in price results in a decrease in total revenue The elasticity coefficient exceeds one An increase in price results in a reduction in total revenue