Which of the following statements is inconsistent with an elastic demand curve?

1. Which of after statements
is inconsistent with a flexible need
bend? inconsistent

The general improvement in amount surpasses the general improvement in
cost.

The price-elasticity coefficient is higher than 1.

Purchasers tend to be fairly responsive to cost modifications.

Complete income increases whenever cost increases.

The general improvement in amount surpasses the general improvement in
cost.

The price-elasticity coefficient is higher than 1.

Purchasers tend to be fairly responsive to cost modifications.

Complete income increases whenever cost increases.

The general improvement in amount surpasses the general improvement in
cost.

The general improvement in amount surpasses the general improvement in
cost.

The price-elasticity coefficient is higher than 1.

The price-elasticity coefficient is higher than 1.

Purchasers tend to be fairly responsive to cost modifications.

Purchasers tend to be fairly responsive to cost modifications.

Complete income increases whenever cost increases.

Complete income increases whenever cost increases.
2. answer comprehensively the question in line with the after need
routine.

Cost
Amount Demanded

$6
1

5
2

4
3

3
4

2
5

1
6

Cost
Amount Demanded

$6
1

5
2

4
3

3
4

2
5

1
6

Cost
Amount Demanded
Cost Amount Demanded
$6
1
$6 1
5
2
5 2
4
3
4 3
3
4
3 4
2
5
2 5
1
6
1 6 Which of after is proper? correct

Even though pitch of need bend is continual, cost
elasticity increases once we move from large to low cost ranges.

Even though need bend is convex toward beginning, cost
elasticity of need is continual throughout.

Even though pitch of need bend is continual, cost
elasticity diminishes once we move from large to low cost ranges.

a high pitch suggests need is inelastic; an appartment pitch means
need is flexible.

Even though pitch of need bend is continual, cost
elasticity increases once we move from large to low cost ranges.

Even though need bend is convex toward beginning, cost
elasticity of need is continual throughout.

Even though pitch of need bend is continual, cost
elasticity diminishes once we move from large to low cost ranges.

a high pitch suggests need is inelastic; an appartment pitch means
need is flexible.

Even though pitch of need bend is continual, cost
elasticity increases once we move from large to low cost ranges.

Even though pitch of need bend is continual, cost
elasticity increases once we move from large to low cost ranges.

Even though need bend is convex toward beginning, cost
elasticity of need is continual throughout.

Even though need bend is convex toward beginning, cost
elasticity of need is continual throughout.

Even though pitch of need bend is continual, cost
elasticity diminishes once we move from large to low cost ranges.

Even though pitch of need bend is continual, cost
elasticity diminishes once we move from large to low cost ranges.

a high pitch suggests need is inelastic; an appartment pitch means
need is flexible.

a high pitch suggests need is inelastic; an appartment pitch means
need is flexible.

Item
percent Improvement In Earnings
percent Improvement In Amount Demanded

W
-1
-1

X
+6
+3

Y
-1
+1

Z
+4
+8

Item
percent Improvement In Earnings
percent Improvement In Amount Demanded

W
-1
-1

X
+6
+3

Y
-1
+1

Z
+4
+8

Item
percent Improvement In Earnings
percent Improvement In Amount Demanded
Item percent improvement in money percent improvement in amount Demanded
W
-1
-1
W -1 -1
X
+6
+3
X +6 +3
Y
-1
+1
Y -1 +1
Z
+4
+8
Z +4 +8 3. reference the above mentioned dining table. Which item is many attentive to
a modification of earnings?

Item Y

Item X

Item Z

Item W

Item Y

Item X

Item Z

Item W

Item Y

Item Y

Item X

Item X

Item Z

Item Z

Item W

Item W

(1) cost elasticity of need = (percent improvement in Qty. Need / percent
improvement in cost)
If need is flexible if percent improvement in Qty need (in absolute
term) is higher than the percent improvement in cost (in absolute term).
In flexible need situation absolutely the worth of cost
elasticity coefficient is higher than 1.
In flexible need situation, there clearly was unfavorable commitment between
cost and complete income.
Ergo a rise in cost will reduce steadily the complete income.
Solution: Choice (D).
(2)

Need bend is linear downward sloping. Ergo the pitch is
continual. In this instance the purchase price elasticity increases as cost
increases from large to low cost ranges.
Steeper the need bend after that inelastic the need.
Flatter the need bend after that elastic the need.
Solution: choice (a)
(3) earnings elasticity = percent improvement in amount demanded / percent modification
in earnings.
Item
W
Earnings elasticity = -1 / -1 = 1
Item
X
Earnings elasticity = 3 / 6 = 0.5
Item
Y
Earnings elasticity = 1 / (-1) = -1
Item
Z
Earnings elasticity = 8 / 4 = 2
Item Z is many attentive to improvement in earnings.
Solution: Choice (C)
2 3 4 Amount Demanded Cost

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

1. Which of the following statements
is inconsistent with an elastic demand
curve?






The relative change in quantity exceeds the relative change in
price.






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 demand
schedule.



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, price
elasticity increases as we move from high to low price ranges.






Although the demand curve is convex to the origin, price
elasticity of demand is constant throughout.






Although the slope of the demand curve is constant, price
elasticity declines as we move from high to low price ranges.






A steep slope means demand is inelastic; a flat slope means
demand 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 to
a change in income?






Product Y






Product X






Product Z






Product W

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