Economics 211 Clicker Questions

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Economics 211 Clicker Questions

• Chapter 5 V1

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A good with many close substitutes is likely to
have an elastic demand because ______.

• 1. If the price rises, consumers can choose to
  purchase one of the close substitutes instead  
• 2. Consumers with brand loyalty won't change
  their buying habits, even if the price changes  
• 3. The laws of supply and demand will drive the
  equilibrium price down

3
Price elasticity of demand for a good depends on
how one defines the good. For example, one could
look at the market for a particular kind of food,
or the market for food in general. Of the
following categories, which one has the LEAST
elasticdemand?

• Food  
• Vegetables  
• Bell peppers  
• Red bell peppers

4
Theresa runs a pizza shop in a college community.
For years, hers was the only restaurant within
four blocks of the college. Now, two new
restaurants, one serving Asian noodles and the
other serving tacos, have opened. Students view
the food served at these other restaurants as a
good alternative to pizza, and as a result,
students' demand for pizza has changed. Given the
greater availability of substitutes for pizza for
these students, which of the following statements
best describes the students' new demand for
pizza as compared to their old demand curve for
pizza?

• Demand becomes more elastic.  
• Quantity demanded shows a greater responsiveness
  to price changes.  
• If the price of pizza rises, students will shrink
  their pizza consumption by more than they would
  have if the other foods weren't available.  
• Visually, the new demand curve will appear less
  steep than the old demand curve.  
• All of these statements are accurate.