6. Income elasticity of demand measures how demand responds to a change in income
True
False
7. What are the different types of elasticity?
Price elasticity of demand, Cross elasticity of demand, Income elasticity of demand, Price elasticity of Supply
Price elasticity of demand, Cross elasticity of demand, Income elasticity of demand, Price elasticity of Supply, Cross elasticity of Supply
Price elasticity of demand, Cross elasticity of demand, Income elasticity of demand, Price elasticity of Supply, Disposable income elasticity of Supply, Investment elasticity of Supply
8. The formula for income elasticity of demand is % change in quantity demanded (divided by) % change in income
True
False
9. What does a steep demand curve show with PED?
That demand is relatively price inelastic
The demand is relatively price elastic
10. When XED is positive, the goods are said to be..
Inferior
Complentary
Independent
11. Price elasticity of supply is always a positive number
False
True
12. If cross elasticity of demand is postive, the goods are said to be..
Free
Substitutes
Independent
13. What does elasticity measure?
The shift in the demand curve
The proportionate responsiveness of the second variable to the change in the first variable
How far the change of one variable can be stretched to reach that of the first variable
14. What is the formula for price elasticity of supply?
% change in quantity supplied (divided by) % change in price
% change in qd of good A (dividided by) % change in price of good B
% change in price (divided by) % change in supply
15. The formula for XED is: % change in quantity demanded of good A (dividided by) % change in price of good B