2. If the cross price elasticity of demand between two goods is negative, then the two goods are:3. Demand for which of following products would be most price elastic?4. What do we mean when we say a product is unit price elastic?1. less price elastic2. more price elastic3. equally price elastic4. more negatively income elastic5. more positively cross price elastic6. The price elasticity of demand is _____ while the price elasticity of supply is ____.7. Producers know they have maximized revenue when they produce a quantity at which price elasticity of demand is:8. Which of the following is true regarding the price elasticity of demand?2. If the cross price elasticity of demand between two goods is negative, then the two goods are: 1. Substitutes 2. Complements 3. Inferior 4. Normal 5. Giffen3. Demand for which of following products would be most price elastic? 1. Fruit 2. Food 3. Apples 4. granny smith apples 5. none of the above4. What do we mean when we say a product is unit price elastic? 1. The product has a price elasticity of demand equal to 1 in absolute value. 2. A small percentage change in the price of the product will have an equal percentage change in the opposite direction in the quantity demanded for that product. 3. The product has a price elasticity of demand equal to -1. 4. All of the above. 5. None of the above.4. What do we mean when we say a product is unit price elastic? 1. The product has a price elasticity of demand equal to 1 in absolute value. 2. A small percentage change in the price of the product will have an equal percentage change in the opposite direction in the quantity demanded for that product. 3. The product has a price elasticity of demand equal to -1. 4. All of the above. 5. None of the above.5. There are fewer substitutes for clothing in general than there are for a specific brand of clothing. This means that the demand for clothing is ____ than the demand for a specific clothing brand. 1. less price elastic 2. more price elastic 3. equally price elastic 4. more negatively income elastic 5. more positively cross price elastic6. The price elasticity of demand is _____ while the price elasticity of supply is ____. 1. greater than 1 in absolute value; less than 1 in absolute value 2. positive; negative 3. positive; positive 4. negative; negative 5. negative; positive7. Producers know they have maximized revenue when they produce a quantity at which price elasticity of demand is: 1. less than zero 2. greater than zero 3. very high 4. very low 5. equal to -18. Which of the following is true regarding the price elasticity of demand?1. The more price responsive consumers are, the flatter the demand curve is.2. The more substitutes there are for a good, the more price elastic the demand for the good.3. When a good is perfectly price elastic, the demand curve is a horizontal line.4. When demand for a good is price elastic, producers can earn more sales revenue by lowering the price of the good.5. All of the above.15. What does price elasticity of demand measure? 1. How quickly consumers can obtain a certain good after it has been produced. 2. How good of a deal consumers received for purchasing the good, relative to the actual cost of the good’s production. 3. How responsive consumers are to price changes in the good. 4. How much the price changes within a given period of time. 5. How much of an influence a given consumer has on the price of a good.16. What is an inferior good? 1. A good that is likely to be defective 2. A good that producers knowingly and falsely advertise as an authentic good 3. A good that tends to be demanded more when income levels are lower 4. A good that was made by inefficient producers 5. A good that has a higher price than it is actually worth17. In order to maximize revenue, if a producer finds demand for its product to be price elastic, this producer should: 1. lower price 2. raise price 3. keep price the same but increase quantity supplied 4. produce less (decrease quantity supplied) 5. none of the above18. Suppose that we have the following information about two commodities: they are normal goods and they can be substituted for each other in consumption by consumers. Based on this information, which of the following statements is correct? 1. The income elasticity of demand is negative for these commodities. 2. The price elasticity of demand is positive for these commodities. 3. The cross-price elasticity of demand is positive for these commodities. 4. The demand is perfectly price elastic for these commodities. 5. None of the above.19. Which of the following pairs of goods are examples of complementary goods? 1. Pancakes and syrup 2. Pens and paper 3. Printers and ink cartridges 4. Toothbrushes and toothpaste 5. All of the above20. Which of the following is true about the inferior goods? 1. Price elasticity of demand for inferior goods is positive 2. Price elasticity of supply for inferior goods is negative. 3. Income elasticity of demand for inferior goods is positive. 4. Income elasticity of demand for inferior goods is negative. 5. Demand for inferior goods is always price inelastic.1. A consumer’s reservation price is:a. The highest price that the consumer is willing to payb. The lowest price that the consumer is willing to payc. The market clearing priced. Equal to the seller’s reservation pricee. None of the above2. When a price floor is imposed below the market price, the result will be thata. Surpluses occur.b. Shortages occurc. Supply and demand will shift up to the new equilibrium.d. Economic inefficiencies occur.e. There will be no effect on the market equilibrium because this is not a binding price floor.3. Consumer surplus:a. Is equal to a consumer’s reservation price minus the price paid for a product.b. Is equal to the amount of economic surplus a consumer has after making a consumption decision.c. The area under the demand curve and above the price paidd. All of the abovee. None of the above4. Which of the following statements regarding government intervention in markets is true?a. Price floors are used to help consumers avoid high market prices.b. Price ceilings always benefit sellers and harm buyers; society may or may not be harmed.c. To be effective, a price floor should be set below the market equilibrium price and a price ceiling should be set above the market equilibrium price.d. Government intervention in the market is always bad for society because free markets always