Question Details

Empirical estimates of the price elasticity of demand 



1.	An income elasticity (Ey) of 2.0 indicates that for a ____ increase in income, ____ will increase by ____.
a.	one percent; quantity supplied; two units
b.	one unit; quantity supplied; two units
c.	one percent; quantity demanded; two percent
d.	one unit; quantity demanded; two units
e.	ten percent; quantity supplied; two percent


	

	2.	When demand elasticity is ____ in absolute value (or ____), an increase in price will result in a(n) ____ in total revenues.
a.	less than 1; elastic; increase
b.	more than 1; inelastic; decrease
c.	less than 1; elastic; decrease
d.	less than 1; inelastic; increase
e.	none of the above


	

	3.	Empirical estimates of the price elasticity of demand [in Table 3.4] suggest that the demand for household consumption of alcoholic beverages is:
a.	highly price elastic
b.	price inelastic
c.	unitarily elastic
d.	an inferior good
e.	none of the above




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