Exam 4: Elasticity: Demand and Supply

Jen considers smoking an inferior good.In other words, for Jen to quit smoking she would require a significant increase in income.

Ceteris paribus, a 10 percent increase in income results in a 50 percent decline in the quantity of potatoes purchased.This implies potatoes can be categorized as _____.

Since the slope of a downward sloping demand curve is constant, the price elasticity of demand does not change when moving along this line.

If a 10 percent increase in price leads to a 20 percent increase in quantity supplied, then the elasticity of supply is 0.5.

An inferior good or service is any good or service for which an increase in income causes a decrease in demand.

In the opinion of many consumers, there are few, if any, substitutes for the popular search engine Google.If Google were to charge consumers for its services, it would face: