Which of the following statements is FALSE? A. A good with a horizontal demand curve has a perfectly elastic demand. B. All of the above statements are false. C. A good with a vertical demand curve has a perfectly inelastic demand. D. A good with a straight line, downward sloping demand curve has a demand whose elasticity is constant.
Which of the following statements is FALSE? A. A good with a horizontal demand curve has a perfectly elastic demand. B. All of the above statements are false. C. A good with a vertical demand curve has a perfectly inelastic demand. D. A good with a straight line, downward sloping demand curve has a demand whose elasticity is constant.
Chapter6: Elasticities
Section: Chapter Questions
Problem 1P
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3. Which of the following statements is FALSE?
A. A good with a horizontal demand curve has a perfectly elastic demand.
B. All of the above statements are false.
C. A good with a vertical demand curve has a perfectly inelastic demand .
D. A good with a straight line, downward sloping demand curve has a demand whose elasticity is constant.
9. If goods A and B are complements, then
A. the cross elasticity of demand between A and B is positive.
B. their income elasticities of demand are both greater than 1.
C. their income elasticities of demand are both less than 1.
D. the cross elasticity of demand between A and B is negative.
12. In the nation of Transporta, the income elasticity of demand for used cars is -2.66. So when incomes in this nation increase by 10 percent
A. the quantity of used cars demanded will decrease by 26.6 percent.
B. used cars will be normal goods.
C. the quantity of used cars demanded will increase by 26.6 percent.
D. the demand curve for used cars will shift rightward.
14. Which of the following represents a price elastic supply?
A. The quantity supplied increases by 21 percent as a result of an increase in the price of 12 percent.
B. The quantity demanded increases 18 percent as a result of a decrease in the price of 8 percent.
C. The price rises by 22 percent causing the quantity supplied to increase by 3 percent.
D. The price rises by 8 percent causing the quantity demanded to fall by 10 percent.
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