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Practice Quiz 3 LATEST 2021/2022

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Which of the following statements is true? If demand is linear, slope will vary across different points on the demand curve whereas the elasticity will be the same at all points on the curve. A lin... ear demand curve has a constant slope, but each point on the curve has a different elasticity. Elasticity does not depend on units whereas slope does. correct A demand curve's slope might change if the units demand is measured in change. The data needed to know the demand curve's entire slope are more likely to be available than the data needed to calculate elasticity at a given price. Elasticity at a point on the demand curve can be approximated if you know how quantity demanded changes with a small price change. Price elasticity of demand and slope are two names for the same concept. Slope measures how much quantity changes as price changes, but elasticity gives a unit-less measure of how significant that change is. 2) A bakery sells individual cupcakes for $3, and boxes of 12 cupcakes for $30. A customer enters the bakery and purchases 4 cupcakes. Which of the following statements must be true of the customer’s willingness to pay? The customer’s willingness to pay for 6 cupcakes is less than $15. The customer’s willingness to pay for 6 cupcakes must be less than $18, but it could be more than $15. The customer’s willingness to pay for 5 cupcakes is less than $15. correct The customer had the option to purchase 5 individual cupcakes for $15. Since the 5th cupcake was not purchased, the customer’s willingness to pay for 5 cupcakes must be less than $15. The customer’s willingness to pay for a 5th cupcake is $0. [Show More]

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