Choose the correct answer no need explanation or solution

The price elasticity of demand is calculated as:

%P/%QD

%QD/%P

%QD/%QS

%QS/%QD

When the price of a good increased by 50 percent, quantity demanded decreased by 100 percent. What is the absolute value of own price elasticity of demand?

0.04

2.0

100

25

Suppose you are told that the price elasticity of supply equal 0.5. Which of the following is the correct interpretation of this number?

A 1% increase in price will result in a 5% increase in quantity supplied.

A 1% increase in price will result in a 50% increase in quantity supplied.

A 1% increase in price will result in a -0.5% increase in quantity supplied.

A 1% increase in price will result in a 2% increase in quantity supplied.

A 1% increase in price will result in a 0.5% increase in quantity supplied.

Consumer surplus is:

1 point

the difference between the amount of money that people would willingly pay for specific quantities of goods and the amounts they pay at market prices.

a measure of the net welfare buying a particular good gives to consumers.

the area above the market price but below the demand curve.

less for goods that are luxuries than for necessities.

At an income of $100, George buys 10 cans of diet Pepsi. At an income of $120, George buys 12 cans of diet Pepsi. What economic classification describes George's demand for diet Pepsi?

1 point

It is a normal good

It is an inferior good

It is a superior good

It is a luxury good

Candice currently spends $200 per month on long distance telephone calls. If the telephone company decides to reduce the rate from 10 cents a minute to 5 cents a minute then:

1 point

the fact that demand curves are downward-sloping implies she will spend more than $200 per month on long distance telephone calls.

she will spend more than $200 per month on long distance telephone calls because her demand shifted out.

whether she spends more or less than $200 per month depends on whether long distance telephone calls are a normal good or an inferior good.

whether she spends more or less than $200 per month on long distance telephone calls depends on whether her demand is elastic or inelastic.

she will spend less than $200 per month on long distance telephone calls because the new price is an effective price floor.