Question : The percentage change in _______ divided by the percentage change in _______ is the income elasticity of demand.

Option 1: The quantity demanded; income

Option 2: Income; the price

Option 3: Income; the quantity demanded.

Option 4: The price; income

Question : The price elasticity of demand is calculated as the percentage change in:

Option 1: Price divided by the percentage change in quantity demanded

Option 2: Quantity demanded divided by the percentage change in price

Option 3: Quantity demanded divided by the percentage change in income

Option 4: Price divided by the percentage change in income

Question : When demand is perfectly inelastic, a change in price will result in:

Option 1: No change in quantity demanded.

Option 2: A small change in quantity demanded.

Option 3: A large change in quantity demanded.

Option 4: An unpredictable change in quantity demanded.

Question : When demand is perfectly elastic, a decrease in price will result in:

Option 1: No change in quantity demanded.

Option 2:  A small change in quantity demanded.

Option 3: A large change in quantity demanded.

Option 4: An unpredictable change in quantity demanded.

Question : Which of the following is a characteristic of demand elasticity?

Option 1: It measures the responsiveness of quantity demanded to changes in price.

Option 2: It measures the responsiveness of quantity supplied to changes in price.

Option 3: It measures the responsiveness of demand to changes in income.

Option 4: It measures the responsiveness of demand to changes in the cost of production.