1. If the percentage change in quantity demanded is less than the percentage change in price, we would say that over this price range, demand is

a. inelastic

b. elastic

c. unit elastic

d. perfectly elastic

2. Assume the demand for a good is price inelastic (in absolute value). This means that if price decreases by 50 percent, quantity demanded will.

a. decrease by less than 50 percent

b. increase by more than 50 percent

c. increase by less than 50 percent

d. decrease by more than 50 percent

3. 1. If the price elasticity of demand for oranges is estimated to be -0.62. This implies that a 100% increase in the price of oranges, all else constant, would cause the quantity demanded of oranges to:

a. increase by 62 percent

b. increase by 6.2 percent

c. decrease by 62 percent

d. decrease by 6.2 percent

4. At any price higher than the equillibrium price a ___ in quantity will be created and at any price lower than the equillibrium price, a __ in quantity will be created.

a. shortage; surplus

b. surplus; shortage

c. shortage; shortage

d. surplus; surplus