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Effect of Income on Demand for Normal Goods Quiz

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Effect of Income on Demand for Normal Goods Quiz

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Questions and Answers

At which point on the demand curve does elasticity become infinity?

Point A

Point t (correct)

Point T

Point R

What is the significance of the midpoint method in calculating price elasticity?

It leads to an infinite price elasticity.

It results in a price elasticity of zero.

It avoids confusion between initial and final price and quantity figures. (correct)

It is only applicable when the demand curve is a straight line.

What happens to elasticity as you move from point T towards point t on the demand curve?

Elasticity remains constant

Elasticity decreases

Elasticity becomes zero

Elasticity increases (correct)

When might arc-elasticity be required to be calculated?

When elasticity needs to be measured over a range of prices Signup and view all the answers

How is elasticity calculated using the midpoint method?

By taking the averages of the initial and final price and quantity figures Signup and view all the answers

What does a point elasticity of zero indicate?

Perfectly inelastic demand Signup and view all the answers

Why is it important to calculate elasticity over an arc of the demand curve?

When price and quantity changes are large Signup and view all the answers

Effect of Income on Demand for Normal Goods Quiz

Choose a study mode

Podcast

Questions and Answers

At which point on the demand curve does elasticity become infinity?

What is the significance of the midpoint method in calculating price elasticity?

What happens to elasticity as you move from point T towards point t on the demand curve?

When might arc-elasticity be required to be calculated?

How is elasticity calculated using the midpoint method?

What does a point elasticity of zero indicate?

Why is it important to calculate elasticity over an arc of the demand curve?

What happens to elasticity at the midpoint of the demand curve?

What does a negative elasticity value indicate?

What does a point elasticity greater than one signify?

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