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Questions and Answers
If the price elasticity of demand (PED) for a good is -1.5, what does this indicate?
If the price elasticity of demand (PED) for a good is -1.5, what does this indicate?
- The demand for the good is elastic
- The demand for the good is inelastic (correct)
- The demand for the good is unit elastic
- The demand for the good is perfectly elastic
What does a price elasticity of -0.5 for a good imply?
What does a price elasticity of -0.5 for a good imply?
- The demand for the good is unit elastic
- The demand for the good is perfectly inelastic
- The demand for the good is elastic (correct)
- The demand for the good is inelastic
Which type of goods are exceptions to the law of demand by having positive elasticity?
Which type of goods are exceptions to the law of demand by having positive elasticity?
- Normal goods
- Veblen and Giffen goods (correct)
- Luxury goods
- Inferior goods
If a good has an elasticity of 0.8, how is the demand classified?
If a good has an elasticity of 0.8, how is the demand classified?
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What does it mean if a good has a price elasticity of demand of -2?
What does it mean if a good has a price elasticity of demand of -2?
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