1.A priceelasticity of supply greater than1

is called __________ and a price elasticity of demand less than1

is called ___________.

a. inelastic; elastic

b. elastic; unitary elastic

c. inelastic; unitary elastic

d. elastic; inelastic

2.Which formula represents price elasticity of demand?

(a) %change in price

%change in quantity supplied

(b) %change in price

%change in quantity demanded

(c) %change in quantity demanded

%change in price

(d) %change in quantity supplied

%change in price

3.Demand for which sort of items are most likely highly elastic or evenperfectly elastic?

a. luxury goods

b. items that take a large share of individuals' income

c. goods with many substitutes

d. all of the above

4.If the magnitude of the elasticity of demand is less than1

at the current price and the price of a major input to production falls, _________________ will reap more of the benefit than ________________.

a. producers; consumers

b. consumers; producers

c. producers; suppliers

d. none of the above

5.When demand is elastic, total revenue ___________ when price _____________ .

Select the2 answers below that correctly fill in the blanks.

a. increases, decreases

b. decreases, decreases

c. decreases, increases

d. increases, increases

6.If we see apositive value from an income elasticity calculation, what can we conclude about a good?

a. the good is a complement to another good

b. the goodis normal

c. the good is inferior

d. the good is a substitute to another good