14. Which of the following is correct If demand is elastic, an increase in price…

14. Which of the following is correct If demand is elastic, an increase in price will increase total revenue. B. If demand is elastic, a decrease in price will decrease total revenue. D. If demand is inelastic, an increase in price will decrease total revenue.
15. The elasticity of demand for a product is likely to be greater A. if the product is a necessity, rather than a luxury good. B. the greater the amount of time over which buyers adjust to a price change C. the smaller the proportion of one’s income spent on the product D. the smaller the number of substitute products available.
16. Price elasticity of demand is generally A. greater in the long run than in the short run. B. greater in the short run than in the long run. C. the same in both the short run and the long run. D. greater for “necessities” than it is for “luxuries.”
17. Which of the following generalizations is not correct? A. The larger an item is in one’s budget, the greater the price elasticity of demand. B. The price elasticity of demand is greater for necessities than it is for luxuries. C. The larger the number of close substitutes available, the greater will be the price elasticity of demand for a particular product. D. The price elasticity of demand is greater the longer the time period under consideration.
18. The longer any price change persists in a given market, the A. more likely price will return to its original level. B. lower is the price elasticity of demand. C. greater is the price elasticity of demand. D. more difficult it is to alter quantity demanded.
19. You are the sales manager for a software company and have been informed that the price elasticity of demand for your most popular software is less than 1. To increase total revenues from that product, you should A. Increase the price of the software B. Decrease the price of the software C. Hold the price of the software constant D. Increase the supply of the software.
20. If the demand for a product is elastic, then: A. A higher tax on the product will generate more tax revenue B. A higher tax on the product will generate less tax revenue C. Total revenue will decrease as price decreases D. Total revenue will remain constant as price increases.
21. The price elasticity of supply measures how: A. easily labor and capital can be substituted for one another in the production process. B. responsive the quantity supplied of X is to changes in the price of X. C. responsive the quantity supplied of Y is to changes in the price of X. D. responsive quantity supplied is to a change in incomes.