Economics Chapter 5 Quiz
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Questions and Answers

What measures buyers' responsiveness to price changes?

  • Price Elasticity of Supply
  • Income Elasticity of Demand
  • Cross Elasticity of Demand
  • Price Elasticity of Demand (correct)

    • Which term describes demand that is very sensitive to price changes?

  • Inelastic Demand
  • Perfectly Inelastic Demand
  • Elastic Demand (correct)
  • Unitary Demand

    • What type of goods experiences an increase in purchases when income rises?

  • Luxury Goods
  • Complementary Goods
  • Normal Goods (correct)
  • Inferior Goods

    • What is the formula used to calculate price elasticity of demand?

    <p>$Ed = rac{(Q2-Q1)/((Q2+Q1)/2)}{(P2-P1)/((P2+P1)/2)}$</p> Signup and view all the answers

    Which factor tends to make demand for a good more elastic?

    <p>Availability of substitutes</p> Signup and view all the answers

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