1. The price elasticity of demand A. A change in quantity demanded B. How far a demand curve shifts C. A change in price D. The responsiveness of quantity demanded to a change in price 2. When a linear demand curve has a price elasticity of zero it will appear A. Vertical . Horizontal C. Concave D. Downward sloping to the left 3. If demand is inelastic A. The coefficient of elasticity is greater than one B. The percentage change in quantity demanded exceeds the percentage change in the price C. An increase in price will increase total revenue D. Buyers are relatively sensitive to price changes 4. The concept of price elasticity of demand measures A. the slope of the demand curve B. the number of buyer in a market C. the extent to which the demand curve shifts as the result of a price decline D. the sensitivity of quantity demanded to price changes 5, The cross elasticity of demand between Pepsi and cola is likely to be A. Zero B. A positive number C. A negative number between -1 and zero D. A negative number less than -1 6. Which of the following does NOT affect the elasticity of demand? A. The availability of substitutes B. Time C. The proportion of consumer income spent D. Cost of production PEC1133 36 MICROECONOMICS Chapter 3: Elasticity 7. If the cross elasticity of demand for two goods is positive, then the two goods are A. Unrelated goods B. Substitute good C. Normal good D. Complementary good