The Figure Given Below Shows the Demand Curves for Five

question 58

Multiple Choice

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1

-Which of the following is true with respect to the price elasticity of demand?

• A)The coefficient of price elasticity of demand will change with changes in the units of measurement (for instance, going from pounds to ounces).
• B)Elasticity of demand is equal to the slope of the demand curve.
• C)Elasticity measures the sensitivity of total expenditure to a change in price of a good.
• D)Elasticity will tend to be greater for a relatively expensive product than for a cheaper one.
• E)A coefficient of 1 means that the percentage change in total expenditure is equivalent to the percentage change in price.

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Definitions:

Trial Balance

An accounting report that lists the balances of all ledger accounts to ensure that debits equal credits, used for internal checks.

Owner's Drawings

Owner's disbursements from a business in either a sole proprietorship or partnership for personal expenditures.

Salaries and Wages Expense

The total amount spent by a business on its employees' salaries and wages during a specific period.

Equipment

Tangible assets used in operations, such as machinery and office hardware, which are subject to depreciation over their useful lives.