Question

39) Elastic

A) A condition whereby the seller is able to raise price and maintain sales.

B) When the percentage change in a variable (such as price) causes a greater percentage change in other variables (such as quantity demanded).

C) A variable such as price has a small effect on the amount consumers want to buy.

D) Demand for a good is elastic if its price elasticity of supply is less than one.

E) The business tool that is useful when keeping your receipts together in preparation for tax time.

40) Inelastic

A) A condition whereby total revenue increases if the factors of production are easier to obtain.

B) The demand for a good is more likely to be inelastic if it has many substitutes.

C) Standard examples of inelastic demand are gasoline and necessities.

D) The demand for a good is inelastic with respect to price if its price elasticity of demand is greater than one.

E) A condition whereby you don’t have one of those things to keep the receipts together.

Answer 1

39. Option B

Explanation: When demand elastic, the % change in quantity is higher than the % change in price.

40. Option C

Explanation: In the case of inelastic demand, the % change in quantity is lower than the % change in price.