1. The arc elasticity formula is used to estimate elasticity when a) the product is thought to be inelastic. b) there are two observations of price and quantity. c) the product is thought to be elastic. d) the demand function is known. (2 marks) 2. If consumers spend N$25 million a month on sugar, regardless of whether the price they pay goes up or down, that implies that their price elasticity of demand for sugars is a. Perfectly inelastic b. Perfectly elastic c. infinite. d. 25. (2 marks) 3. A supply curve for a good shows the a) maximum quantities sellers are willing to offer for sale at alternative prices. b) maximum quantities that can be produced at alternative prices. c) quantities sellers will offer as their production costs change. d) quantities sellers can legally supply. (2 marks) 4. If the income elasticity of demand is +4 a) the good is an inferior good. b) the good is an inelastic normal good. c) the good is an elastic normal good. d) the good is an elastic inferior good. (2 marks)