If the demand for a good is elastic with respect

i. percentage change in price will result in a smaller percentage change in quantity demanded

ii. percentage change in price will result in a greater percentage change in quantity demanded

iii. change in price will cause revenues (or consumer expenditures) to change in the same direction

iv. change in price will cause revenues (or consumer expenditures) to change in the opposite direction

2(6)- If the demand for a good is price elastic at the current market price then:

i. the price elasticity is greater than one

ii. buyers are said to be relatively insensitive to changes in price

iii. total revenue will increase if price increases

iv. a percentage change in price will result in a smaller percentage change in quantity demanded

3(7)- If the demand for a good is given by the linear equation Q = 160 - 4P, then as price is lowered from the choke price to zero the total expenditures on the good:

decrease continuously

increase continuously

decrease initially and then increase

increase initially and then decrease

are constant

4(9)- Which of the following statements is correct?

i. if a percentage change in price results in a greater percentage change in quantity demanded, then demand is elastic

ii. in the range of prices in which the demand for a good is elastic, total revenue (or expenditures) will decrease if price decreases

iii. along a linear demand curve, demand is elastic above the mid-point and inelastic below the mid-point

iv. total revenue will not change as a result of a change in price if demand is unit elastic

5(11)- If the price elasticity of demand is 1.44, 0.36, 0.92, and 2.58 for products A, B, C, and D respectively, then a one percent decrease in price will decrease total revenue (TR) in which of the following:

A and B

A and C

A and D

B and C

B and D

C and D

6(12)- Suppose that an 5 percent increase in the price of good X causes a 8 percent increase in the quantity demanded of good Y. The cross-price elasticity of demand is therefore:

positive and the goods are substitutes

positive and the goods are complements

negative and the goods are substitutes

negative and the goods are complements

7(13)- If purchases of a good increase as a result of a decrease in household income, then:

the good is normal and the income elasticity of demand is negative

the good is inferior and the income elasticity of demand is negative

the good is normal and the income elasticity of demand is positive

the good is inferior and the income elasticity of demand is positive

8- The price elasticity of supply is defined as the:

percentage change in price divided by the quantity supplied

percentage change in quantity supplied divided by the percentage change in price

percentage change in price divided by the percentage change in quantity supplied

change in quantity supply divided by the change in price

change in price divided by the change in quantity supplied

percentage change in quantity supplied divided by the price

9- The demand for nuts, such as almonds, walnuts, and cashews, has increased sizably in recent years, however, it takes a considerable amount of time to increase their production. It follows that:

the supply curve for nuts over a long period (e.g., ten years) is more elastic than the supply curve for nuts over a short period (e.g., one year)

the supply curve for nuts over a long period (e.g., ten years) is less elastic than the supply curve for nuts over a short period (e.g., one year)

an increase in the demand for nuts will not affect their price over a short period (e.g., one year)

an increase in the demand for nuts will result in a larger increase in the quantity supplied over a short period (e.g., one year) compared to a long period (e.g., ten years)