## Which of the following would cause a demand curve for a good to be price inelastic ?

A. The good is luxury
B. There are a great number of substitutes for the good
C. The good is a necessity
D. The good is an inferior good

## If the income elasticity of demand for a good is negative it must be ?

A. an elastic good
B. an inferior good
C. a normal good
D. a luxury good

## If demand is linear (a straight line) then price elasticity of demand is ?

A. elastic in the upper portion and inelastic in the lower portion
B. inelastic in the upper portion and elastic in the lower portion
C. inelastic throughout
D. constant along the demand curve

A. substitutes
B. complements
C. necessities
D. luxuries

## in general a flatter demand curve is more likely to be ?

A. price elastic
C. unit price elastic
D. price inelastic

## If there is excess capacity in a production facility it is likely that the firm’s supply curve is ?

A. price inelastic
B. none of these
C. unit price elastic
D. price elastic

## If consumers think that there are very few substitutes for a good, then ?

A. Supply would tend to be price elastic
C. demand would tend to be price inelastic
D. demand would tend to be price elastic

A. 1.50
B. 1.15
C. none of these
D. 0.15
E. 1.00

## Suppose that at a price of Rs 30 per month there are 30000 subscribers to cable television in small Town. If small Town Cablevision raise its price to Rs 40 per month the number of subscribers will fall to 20000 At which of the following price does small Town Cablevision earn the greatest total revenue ?

A. Rs 0 per month
B. Rs 30 per month
C. Rs 40 per month
D. Either Rs 30 or Rs 40 per month because the price elasticity of demand is 1.0

## If a fisher must sell all of his daily catch before it spoils for whatever price he is offered once the fish are caught the fisherman’s price elasticity of supply for fresh fish is ?

A. zero
B. infinite
C. one
D. unable to be determined form this information

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