1. Which of the following statementsis inconsistent with an elastic demandcurve?

		The relative change in quantity exceeds the relative change inprice.
		The price-elasticity coefficient is greater than 1.
		Buyers are relatively sensitive to price changes.
		Total revenue increases when price increases.

2. Answer the question on the basis of the following demandschedule.

Price	Quantity Demanded
$6	1
5	2
4	3
3	4
2	5
1	6

Which of the following is correct?

		Although the slope of the demand curve is constant, priceelasticity increases as we move from high to low price ranges.
		Although the demand curve is convex to the origin, priceelasticity of demand is constant throughout.
		Although the slope of the demand curve is constant, priceelasticity declines as we move from high to low price ranges.
		A steep slope means demand is inelastic; a flat slope meansdemand is elastic.

Product	% Change in Income	% Change in Quantity Demanded
W	-1	-1
X	+6	+3
Y	-1	+1
Z	+4	+8

3. Refer to the above table. Which product is most responsive toa change in income?

		Product Y
		Product X
		Product Z
		Product W

Answer rating: 100% (QA)

Solutions 1 The Price elasticity 1 Option B is correct coeffic... View the full answer