Question 1 The following is the MOST PRECISE definition of the Own Price Elasticity of Demand: Is the measure of how sensitive is the consumer to...

Question 1

The following is the MOST PRECISE definition of the Own Price Elasticity of Demand:

A. Is the measure of how sensitive is the consumer to change in prices.

B. It measures the slope of the demand curve.

C It measures the percentage change in quantity demanded of good x as a result of a percentage change in price per unit of good x.

D. It measures the total change in quantity demanded of good x as a result of a total change in price per unit of good x.

Question 2

The following are characteristics related to a good with a highly Inelastic demand, EXCEPT:

A. Own price elasticity of demand, in absolute terms, is less than one.

B. The consumer has little sensibility to any change in price for that good.

C. The % change in quantity is smaller than the corresponding % change in price.

D. If price increases, total revenue will decline.

Question 3

The following are some characteristics of a good with a highly Elastic demand, EXCEPT:

A. Has close substitutes

B. Is addictive in nature.

C. It's unnecessary.

D. It has a low adjustment cost in consumption.

Question 4

The following is the value of price elasticity between the following two points:

A: {P1 = 2, Q1=20 }

B: {P2 = 4, Q2=10 }

Question 4 options:

A. lEpl = 2

B. Ep = -1/2

C. lEpl=1/2

D. lEpl = 1

Question 5

Given the following Linear Dermand, identify the price and quantity that would Maximize Total Revenue:

Qx = 80 - 4P

Question 5 options:

A. Q =80 & P=$10

B. Q =40 & P=$20

C. Q =40 & P=$10

D. Q =20 & P =$40