Price Elasticity of Demand Quiz
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Questions and Answers

What does the phrase 'more elastic' mean in the context of price elasticity?

  • A good's elasticity has greater magnitude, ignoring the sign (correct)
  • A good's elasticity has a positive value, ignoring the sign
  • A good's elasticity has a smaller magnitude, ignoring the sign
  • A good's elasticity has a positive value

    • What does a price elasticity of -2 indicate?

  • A one percent price rise leads to a one percent decline in quantity demanded
  • A two percent price rise leads to a two percent decline in quantity demanded
  • A two percent price rise leads to a one percent decline in quantity demanded
  • A one percent price rise leads to a two percent decline in quantity demanded (correct)

    • When is the price elasticity of demand negative?

  • Only for luxury goods
  • Only for essential goods
  • For all goods
  • Except in special cases (correct)

    • What does the income elasticity of demand measure?

    <p>How the quantity demanded changes with consumer income changes</p> Signup and view all the answers

    What do Veblen and Giffen goods represent?

    <p>Two special cases of goods</p> Signup and view all the answers

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