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Econ 102 Exam #2 PSU Questions and Answers (Latest Update 2025)
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Econ 102 Exam #2 PSU Questions and Answers (Latest Update 2025)
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Econ 102 Exam #2 PSU Questions andAnswers (Latest Update 2025)
relatively flat graph indicates
steep one indicates - Correct Answer ✅ small change in
price will cause a huge change in quantity demanded
even with a very large price increase, Qd will only fall a small
amount
elasticity - Correct Answer ✅ the sensitivity between 2
variables
price elasticity of demand - Correct Answer ✅ the
sensitivity of the change in the qd of a good in response to a
change in the price of the good
demand is elastic when... - Correct Answer ✅ the qd is
relatively responsive to a change in the products own price
demand is inelastic when... - Correct Answer ✅ the qd is
relatively unresponsive to changes in price
,Econ 102 Exam #2 PSU Questions and
Answers (Latest Update 2025)
elastic goods? - Correct Answer ✅ goods with many
substitutes, specific brand of cereal
inelastic goods - Correct Answer ✅ gas, college tuition, no
good substitutes, cigs, toilet paper, life saving drugs
determinants of price elasticity of demand: - Correct
Answer ✅ 1. the number and quality of substitutes
2. share of income spent of a good directly relates to price
elasticity of demand
3. passage of time
more substitutes implies - Correct Answer ✅ elastic
demand
what does share of income mean? how does it effect price
elasticity? - Correct Answer ✅ how much of my wallet do I
have to give up?
cars, houses --> elastic
, Econ 102 Exam #2 PSU Questions and
Answers (Latest Update 2025)
gum, candy --> inelastic (if price change, not a big deal will
still buy)
2nd Law of Demand - Correct Answer ✅ demand is more
responsive to price in the long run than in the short run.
passage of time:
long run = more ___
short run = more ____ - Correct Answer ✅ elastic
inelastic
Formula for demand elasticity - Correct Answer ✅ Ed =
%change Qd / %change P < 0
demand elasticity will always be (neg/pos) due to - Correct
Answer ✅ neg; the downward sloping nature of the demand
curve
if price increases, qd will... - Correct Answer ✅ decrease
(vice versa)
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