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 ```6)alice sys that she would buy one banana split a day regardless of the price. If she is telling the truth, a) her demand for banana splits is perfectly inelastic. b)her price elastitcity of demand for banana splits is 1. c)her income elasticity of demand for banana splits is negative. d)none of the above. 7)An auto rental company lowers the price of rentals to increase its market share. The price cut increases quantity demanded, but total revenue decreases. The result suggests that over this price range, the demand for the auto rentals is: a)elastic b)inelastic c)unit elastic d)perfectly elastic 8)An increase in the price of tickets to a popular sporting event will increase total revenue if: a)there are many substitutes for the product. b)the ticket is considered to be a luxury . c)the demand for tickets is inelastic. d)the demand for tickets is elastic. 9)Consider a situation where the U.S. Congress wants to place a special tax on private airplanes to increase tax revenue. This tax would only be effective in raising new tax revenues if the price of elasticity is: a)supply is elastic b)supply is inelastic c)demand is elastic d)demand is inelastic 10) Elasticity of demand id closely realted to the slope of the demand curve. The less responsive buyers are to a change in price, the demand curve will be: a)steeper b)further to the right c)flatter d)closer to the vertical axis```
 ```6. a) her demand for banana splits is perfectly inelastic. "Perfectly inelastic demand means that there is no change at all in quantity demanded when price goes up or goes down." (page 744) 7. b) inelastic. "Price-inelastic demand (or inelastic demand). The situation in which price elasticity of demand is below 1 in absolute value. In this case, when price declines, total revenue declines...." (page 744) 8. c) inelastic. "Price-inelastic demand (or inelastic demand). The situation in which price elasticity of demand is below 1 in absolute value. In this case, ...when price is increased, total revenue goes up." (page 744) 9. d) demand is inelastic. The tax acts as an increase in cost to the buyer. So, the situation is similar to that in question 8. 10. a) steeper. "A change in the quantity buyers want to purchase, prompted by any reason other than a change in price...is a "change in demand." (In graphical terms, it is a shift of the demand curve.) If, in contrast, the decision to buy more or less is prompted by a change in good's price, then it is a "change in quantity demanded." (page 731) This definition eliminates answers b) and d). Perfectly elastic demand is flat (page 68, Figure 5-3). As is illustrated in Figure 5-2 on page 67, inelastic demand, which occurs when buyers are less responsive to changes in price, is quite steep. In fact, in Figure 5-3, perfectly inelastic demand is a vertical line. Sincerely, Wonko Source: "Economics" 14th edition, by Samuelson & Nordhaus, McGraw-Hill Inc., 1992```