1)Which of the following statements about price elasticity of demand is correct?

2 Which of the following statements about the price elasticity of demand is incorrect?

3 An increase in demand for and supply of agricultural products has occurred as the world's population has increased over time. However, the incomes of small agricultural producers have fallen over time because the:

4 If at a price of $15, 20 units are sold, while at $20, 10 units are sold, then the price elasticity of demand for this good is:

5 If 20 units are sold at a price of $50 and 30 units are sold at a price of $40, then the price elasticity of demand calculated using the midpoint formula is:

6 If at a price of $100, 10 units were sold, while at a price of $125, eight units were sold, the price elasticity of demand value using the midpoint formula is:

7 Following the deregulation of the telecommunications industry in Australia, the price of long distance and overseas phone calls fell significantly. Firms in the telecommunications industry would have been hoping that the demand for long distance and overseas phone calls was:

8 Suppose the demand curve for a product is represented by a typical downward sloping curve. Now suppose the demand for this product increases. Which of the following statements accurately predicts the resulting increase in price?

9 If a firm was accused by the Australian Competition and Consumer Commission of trying to monopolise a product, the firm would hire an economist to try to show the:

10 Table 4.1

Refer to Table 4.1. Assume that an economist has estimated the price elasticity of demand values in the table above. Use the data in the table to select the correct statement.

11 If 40 units are sold at a price of $40 and 60 units are sold at a price of $20, then the price elasticity of demand calculated using the midpoint formula is:

12 Which of the following statements about price elasticity of demand is correct?

14 Which of the following statements about the price elasticity of demand is incorrect?

15 Suppose the demand curve for hybrid cars shifts to the right. This will cause a relatively small increase in the price of hybrid cars if:

16 If at a price of $10, five units are sold, while at a price of $80, five units are sold, then the price elasticity of demand for this good is:

17 If the government wanted to reduce the consumption of water by domestic water users by 5 percent and the price elasticity of water for domestic users is -0.2, the government should:

18 If at a price of $10, five units are sold, while at a price of $8, six units are sold, then the price elasticity of demand for this good is:

19 Since 1960 there has been a substantial increase in wheat production in Australia. The increase in production has led to a decrease in the price of wheat because of which of the following factors?

20 If at a price of $15, 20 units are sold, while at $20, 10 units are sold, then the price elasticity of demand for this good is:

21 If at a price of $50, 20 units are sold and at a price of $60, 0 units are sold, the price elasticity of demand of the good is:

22 Which of the following explains why a firm would be interested in knowing the price elasticity of demand for a good it sells?

23 Why have incomes of small family farms decreased over time?

24 Suppose you own a bookstore. You believe that you can sell 40 copies per day of the latest popular spy novel when the price is $35. You consider lowering the price to $25 and believe this will increase the quantity sold to 50 books per day. Compute the price elasticity of demand using the mid-point formula. Select the correct implication from your work.

25 Assume that personal after-tax income increased by 5 percent and, as a result, the quantity of chocolate demanded increased by 8 percent. All calculations below are correct. Using your knowledge of the income elasticity of demand formula, select the correct income elasticity of demand for chocolate from the options below.