The price elasticity of demand

A)

measures the extent to which prices are flexible and respond to market forces

B)

measures the responsiveness of quantity demanded to

C)

measures the responsiveness of demand when price is held constant and demand increases or decreases

D)

measures the responsiveness of price to a change in quantity demanded

The formula for cross elasticity of demand is percentage change in:

A)

quantity demanded of X/percentage change in price of X.

B)

quantity demanded of X/percentage change in income.

C)

quantity demanded of X/percentage change in price of Y.

D)

price of X/percentage change in quantity demanded of Y.

A perfectly inelastic demand curve:

1)

has a price elasticity coefficient greater than unity.

2)

has a price elasticity coefficient of unity throughout.

3)

graphs as a line parallel to the vertical axis.

4)

graphs as a line parallel to the horizontal axis.

If the income elasticity of demand for lard is 3.00, this means that:

1)

lard is a substitute for butter.

2)

lard is a normal good.

3)

lard is an inferior good.

4)

more lard will be purchased when its price falls.