ELASTICITY

There are 10 000 seats available at Centre Court for the Wimbledon Tenn is Championships. The price per ticket is fixed by the organisers. The supply of seats is thus: A. completely elastic B. elastic C. unitary elastic D. inelastic E. completely inelastic Question 2 If the price of the seats in the question above is fixed below the equilibrium price, there will be: A. an excess demand for seats. B. an excess supply of seats. C. no scope for the development of a black market. D. no need to ration the tickets. E. a lot of empty seats. Question 3 If the price of the seats is fixed above the equilibrium price, there will be: A. an excess demand for seats. B. an excess supply of seats. C. scope for the development of a black market. D. a need to ration the tickets. E. no empty seats. Question 4 Which one of the following commodities will have the lowest price elasticity of demand? A. Castle Lite beer B. Light beer C. Beer D. Alcoholic drink (including beer) Question 5 When the price of commodity A is cut by 10%, household spending on A falls by 10%. This is an example of: A. perfectly elastic demand. B. elastic demand. C. unitary elasticity of demand. D. inelastic demand. E. perfectly inelastic demand