Directions: Please read and analyze the questions carefully. For each item, encircle the correct answer. 1. In the market, the price elasticity for the demand of ethyl alcohol sold by the ABM Drug Store is the: a) ratio of the percentage change in quantity demanded for the ethyl alcohol to the percentage change in its price. b) responsiveness of revenue to a change in quantity of the ethyl alcohol c) ratio of the change in quantity demanded divided by the change in its price of the ethyl alcohol. d) response of revenue to a change in the price of ethyl alcohol 2. If demand for the banana lakatan of a vendor in the market is elastic, then a a) rise in the price of banana lakatan will raise the total revenue b) fall in the price of banana lakatan will raise total revenue of the vendor c) fall in the price of banana lakatan will lower the quantity demanded d) rise in the price of banana lakatan won't have any effect on total revenues 3. If the cross-price elasticity between sinamon bread and pizza is 1.5, a) the two goods are luxury goods b) the two goods are complements c) the two goods are substitutes d) the two goods are normal goods 4. The price elasticity of demand for a certain good tends to be: a) smaller in the long run than in the short run b) smaller in the short run than in the long run c) larger in the short run than in the long run d) unrelated to the length of time 5. If the price elasticity of supply of ripe mangoes is 0.60 and the price will increase by 3 percent, then the quantity supplied for ripe mangoes will increase by how much? a) 0.60 percent b) 0.20 percent c) 1.8 percent d) 18 percent