1. The law of demandstates that:
a.as the quantity demanded rises, the price falls
b. as income rises, the demand for the product rises
c.as the price rises, the quantity demanded falls
d. as supply rises, the demand rises
2. The demand curve normally slopes
a. down to the right
b. up to the right
c. horizontally
d. vertically
3. The price elasticity of demand is the:
a. percentage change in quantity demanded divided by the percentage change in price
b. percentage change in price divided by the percentage change in quantity demanded
c. dollar change in quantity demanded divided by the dollar change in price
d. percentage change in quantity demanded divided by the percentage change in quantity supplied
4. If the price elasticity of demand equals 0.5, the demand for the product is:
a. relatively inelastic
b. perfectly inelastic
c. relatively elastic
d. unit elastic
5. Community Colleges desired to increase revenues. They decided to raise fees paid by students with Bachelors degrees to $50 because they believed this would result in greater revenues. Therefore, the Community Colleges must have believed that the demand for Community College courses by people with Bachelors degrees is:
a. relatively inelastic
b. unit elastic
c. relatively elastic
d. perfectly elastic
6. The demand for a product would be more inelastic:
a. the longer is the time under consideration
b. the greater is the number of substitutes available to buyers
c. the less expensive is the product in relation to incomes
d. all of the above