Exam 5: Elasticity: a Measure of Responsiveness

Assume the price of textbooks rises from $90 to $110 and the quantity supplied increases from 750 to 850 per week.Using the initial price method the price elasticity of supply is:

The price of cabbage rises from $0.20 per pound to $0.30 per pound.The quantity of cabbage demanded falls from 800 pounds per week to 600 pounds per week.Use the initial value formula to calculate the price elasticity of demand for cabbage.Is the demand elastic,inelastic,or unit elastic?

An Internet company wants to increase the consumption of Internet packages by 15%.The price elasticity of demand for Internet packages is 2.The telephone company should:

An increase in supply caused no change in the equilibrium price of a good.Thus,demand must be:

Lenny buys less oatmeal for breakfast when his income rises.This means that,for Lenny:

Suppose the price elasticity of supply for rocking chairs is 1.2 and the price increases by 20%.The quantity supplied will increase by ________ %.

Consider the market for Chinese food in a large city like Philadelphia.If the number of Chinese restaurants increases and the price elasticity of demand for Chinese food is 2.0,then the equilibrium price of Chinese food will ________,the equilibrium quantity demanded of Chinese food will ________,and total Chinese food revenue will ________.

A perfectly inelastic demand curve is shown as a:

If the price elasticity of demand for tablets is 3,then a 10% increase in the price will result in an increase in total revenue.

Recall the Application about finding estimates on elasticities of demand,which of the following Web sites provides estimates of demand elasticities for hundreds of food products in different countries?

If the price elasticity of demand is 2 then a 4% increase in the price of the product can be expected to reduce quantity demanded by 8%.

The price elasticity of demand for new stereos is 2.Suppose a stereo store wishes to increase its sales by 15 percent.What should the firm do?

Which of the following individuals is likely to have the most inelastic demand for air travel?