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Questions and Answers
What is a major difference between the short run and long run in terms of price elasticity of demand?
What is a major difference between the short run and long run in terms of price elasticity of demand?
- There is no difference in price elasticity between the short and long run
- People can make some lifestyle changes in the short run, but more in the long run (correct)
- People can carpool in the short run but not in the long run
- People can make significant changes to their lifestyle in the short run
What is the rule of thumb for determining price elasticity from a demand curve?
What is the rule of thumb for determining price elasticity from a demand curve?
- The flatter the curve, the smaller the elasticity
- The flatter the curve, the bigger the elasticity (correct)
- The steeper the curve, the bigger the elasticity
- The steeper the curve, the bigger the elasticity
What type of demand curve has an elasticity of 0?
What type of demand curve has an elasticity of 0?
- Unit Elastic Demand
- Perfectly Elastic Demand
- Perfectly Inelastic Demand (correct)
- Relatively Elastic Demand
What is an example of a product with perfectly inelastic demand?
What is an example of a product with perfectly inelastic demand?
What is the main reason for the difference in price elasticity between the short run and long run?
What is the main reason for the difference in price elasticity between the short run and long run?
What is the characteristic of inelastic demand?
What is the characteristic of inelastic demand?
What type of demand is characterized by a horizontal demand curve?
What type of demand is characterized by a horizontal demand curve?
What is the value of elasticity in a situation where the percentage change in quantity demanded is equal to the percentage change in price?
What is the value of elasticity in a situation where the percentage change in quantity demanded is equal to the percentage change in price?
What happens to revenue when there is a price increase in a situation of elastic demand?
What happens to revenue when there is a price increase in a situation of elastic demand?
What is the shape of the demand curve in a situation of inelastic demand?
What is the shape of the demand curve in a situation of inelastic demand?
What is the characteristic of a linear demand curve?
What is the characteristic of a linear demand curve?
What is the main determinant of which effect is bigger when the price of a product is increased?
What is the main determinant of which effect is bigger when the price of a product is increased?
What happens to the revenue when the price of a product is increased and demand is elastic?
What happens to the revenue when the price of a product is increased and demand is elastic?
What is the value of the price elasticity of demand when the percentage change in quantity demanded is greater than the percentage change in price?
What is the value of the price elasticity of demand when the percentage change in quantity demanded is greater than the percentage change in price?
What happens to the revenue when the price of a product is increased and demand is inelastic?
What happens to the revenue when the price of a product is increased and demand is inelastic?
What is the relationship between the percentage change in quantity demanded and the percentage change in price when demand is inelastic?
What is the relationship between the percentage change in quantity demanded and the percentage change in price when demand is inelastic?
What is the formula for calculating revenue?
What is the formula for calculating revenue?
Why is the price elasticity of supply often greater in the long run than in the short run?
Why is the price elasticity of supply often greater in the long run than in the short run?
What is the elasticity of demand for illegal drugs due to?
What is the elasticity of demand for illegal drugs due to?
What is the result of interdiction policy on drug-related crime?
What is the result of interdiction policy on drug-related crime?
What is the effect of education policy on the demand for drugs?
What is the effect of education policy on the demand for drugs?
What happens to total expenditure on insulin if pharmacies raise the price by 10% and demand is inelastic?
What happens to total expenditure on insulin if pharmacies raise the price by 10% and demand is inelastic?
What is the relationship between the total dollar value of drug-related crime and total expenditure on drugs?
What is the relationship between the total dollar value of drug-related crime and total expenditure on drugs?
What is the result of education policy on drug-related crime?
What is the result of education policy on drug-related crime?
What happens to the total revenue of luxury cruise companies if the price of a luxury cruise falls by 20% and demand is elastic?
What happens to the total revenue of luxury cruise companies if the price of a luxury cruise falls by 20% and demand is elastic?
What is the income elasticity of demand for a normal good?
What is the income elasticity of demand for a normal good?
What happens to demand for a normal good when consumer income increases?
What happens to demand for a normal good when consumer income increases?
What determines the direction of the change in expenditure when the price of a good increases?
What determines the direction of the change in expenditure when the price of a good increases?
What is the relationship between the change in price and the change in quantity demanded if demand is inelastic?
What is the relationship between the change in price and the change in quantity demanded if demand is inelastic?
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