Suppose that the price elasticity of demand of a good is -3. Its demand is _________ and the percentage change in its quantity demanded is ________ than the percentage change in its price.

A. Elastic: Smaller

B. Elastic: Greater

C. Inelastic: Smaller

D. Inelastic: Greater

Which of the following is not a determinant of the price elasticity of demand?

A. Availability of substitutes

B. Degree of necessity

C. Cost relative to income

D. Availability of inputs

With a(n) ______ demand, price and total revenue move in the _________ direction.

A. Unit-elastic: Opposite

B. Elastic: Same

C. Inelastic: Opposite

D. Inelastic: Same

The price elasticity of supply is a quantitative measure of how responsive the quantity supplied of a good is to the change in its ______ and its sign is normally _______ due to the law of supply.

A. Income: Negative

B. Price: Negative

C. Price: Positive

D. Income: Positive

Which of the following characteristics of the price elasticity of supply is false?

A. It is a direction free measure by using a mid-point method.

B. It is the same as the slope of the supply curve.

C. It is a unit-free measure by using the percentage change

D. It is calculated by the slope method if there is only one point on the supply curve.

Suppose that the price elasticity of supply for a good is 0.5. Its supply is ________ and its percentage change in the quantity supplied is __________ than its percentage change in the price.

A. Unit elastic: Greater

B. Inelastic: Greater

C. Elastic: Smaller

D. Inelastic: Smaller

Which of the following is not a determinant of the price elasticity of supply?

A. Flexibility of production process

B. Availability of inputs

C. Adjustment time

D. Scope of the market

The income elasticity of demand is a quantitative measure of how sensitive the quantity demanded of a good is to the change in _____. A good is a(n)______ good if its sign is negative.

A. Income: Inferior

B. Price: Necessity

C. Income: Luxury

D. Price: Normal