Transcript If demand is inelastic, then

ECONOMICS 211
CLICKER QUESTIONS
Chapter 5 –Set #2
If demand is inelastic, then
1.
2.
3.
4.
buyers do not respond to a change in
price.
buyers respond substantially to a
change in price, but the response is
very slow.
buyers do not alter their quantities
demanded much in response to
advertising, fads, or general changes
in tastes.
buyers do not respond much to a
change in price.
Response
Counter
25%
1.
25%
2.
25%
3.
25%
4.
The midpoint method is used to compute
elasticity because it
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Response
Counter
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4.
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3.
25% 25% 25% 25%
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2.
automatically computes a positive
number instead of a negative
number.
results in an elasticity that is the
same as the slope of the demand
curve.
gives the same answer regardless
of the direction of change.
automatically rounds quantities to
the nearest whole unit.
gi
1.
Suppose the price of Twinkies decreases from $1.45 to $1.25 and,
as a result, the quantity of Twinkies demanded increases from
2,000 to 2,200. Using the midpoint method, the price elasticity of
demand for Twinkies in the given price range is
64
0.
00
1.
.
25%
.
25%
.
55
Response
Counter
1.
4.
25%
.
3.
25%
00
2.
2.00.
1.55.
1.00.
0.64.
2.
1.