Economics 1021A/B Study Guide - Midterm Guide: Pearson Education, Inferior Good, Photocopier

8. A price elasticity of demand of 2 means that a 10 percent increase in price will result in a A) 2 percent decrease in quantity demanded. B) 5 percent decrease in quantity demanded. C) 20 percent decrease in quantity demanded. D) 2 percent increase in quantity demanded. E) 20 percent increase in quantity demanded.

66) 66) A price elasticity of demand of 2 means that a 10 percent increase in price will result in a A) 5 percent decrease in quantity demanded. B) 20 percent decrease in quantity demanded. C) 20 percent increase in quantity demanded. D) 2 percent decrease in quantity demanded. E) 2 percent increase in quantity demanded.

Absolute price elasticity of demand equal to 0.4 indicates that a

A. 1 percent increase in price leads to a 4 percent decrease in quantity demanded.

B. 10 percent decrease in price leads to a 4 percent increase in quantity demanded.

C. 0.4 percent decrease in price leads to a 1 percent increase in quantity demanded.

D. 4 percent increase in price leads to a 10 percent decrease in quantity demanded.