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Homework answers / question archive / 1) The sensitivity of the change in quantity consumed of one good to a change in the price of a related good is called A) cross-elasticity
1) The sensitivity of the change in quantity consumed of one good to a change in the price of a related good is called A) cross-elasticity. B) substitute elasticity. C) complementary elasticity. D) price elasticity of demand.
2. The price elasticity ordemand is a measure of A) the responsiveness of the quantity demanded to price changes. B) the quantity demanded at a given price. C) the shift in the demand curve when price changes. D) the demand for a product holding price constant.
3. The elasticity of demand for a product is likely to be greater A) the smaller the number of substitute products available. B) the smaller the proportion of one's income spent on the product. C) the larger the number of substitute products available. D) if the product is animported good rather than a domestically produced good.
4. If the consumption of sugar does not change at all following a price increase from 50 cents per pound to 65 cents per pound, the demand for sugar is considered to be A) relatively inelastic. B) perfectly elastic, C) perfectly inelastic. D) unitary elastic.
1) The sensitivity of the change in quantity consumed of one product to a change in the price of a related product is called "Cross elasticity of demand". So, the correct option is 1st "Cross Elasticity".
2) Price elasticity is related degree of responsiveness in quantity demanded when their is a little change in price even. So, the correct option is A "a measure of the responsiveness of the quantity demanded to changes in price".
3) The more substitute more elastic the good because the change in price MU per dollar of substitute changes so in equilibrium price quantity change more than price. The correct option is C "the larger the number of substitute products available".
4) The demand of a good is said to be perfectly inelastic when the quantity demanded remains same irrespective of change in price of goods. The demand curve is a vertical line in this case.
So, the correct option is C "Perfectly inelastic".
