ECON 201 Lecture 25: NoteDec2-Ch22

In interpreting the Ed value as either elastic or inelastic, we look at the:
A. Ed coefficient with its negative sign
B. Absolute value of the Ed coefficient
C. Percent change in price
D. Percent change in quantity

1. If the demand for movie tickets is elastic, then

A. Ed > 1.

B. Ed < 1.

C. Ed = 1.

D. Ed = 0. 

2. "Inelastic demand" means that

A. quantity demanded is very sensitive to price.

B. quantity demanded is not very sensitive to price.

C. price is very sensitive to quantity demanded.

D. price is not very sensitive to quantity demanded.

33. At the current level of output of a firm, we know that P = MR-MC>AC>AVC>0. What can we tell about the elasticity of demand (Ep) for the output of this entire industry at this output? (A) Ep > 5.0 (B) ED > 2.0 (C) ED > 1.0 (D) Ep = 1.0 (E) ED < 1.0 (F) Ep < 0.0 (G) elasticity is infinite (TT) X is not possible to tell anything about the elasticity of demand W none of the above (J) all of the above