Exam 4: Elasticity

If your demand for a good is ________, then a 1 percent fall in its price will lead you to ________ your expenditures on the good.

Last year in the United States, the price of snowboards rose by 5 percent and the price rise resulted in a 15 percent increase in the quantity supplied. This outcome is an indication that

-The table above gives the demand schedule for museum visits. a) You, as the resident economist, have been given the task of maximizing the museum's total revenue. What admission price should you charge? b) What is the elasticity of demand between $6 and $4? c) Moving along the demand schedule from $10 to $8 to $6 and ultimately to $4, how does the price elasticity of demand change in size?

If students' expenditures on airline travel increase as a consequence of more heavily discounted fares, students' demand for airline travel must be

In Brazil, the income elasticity of demand for dairy is 0.7 and for fruit and vegetables it is 0.5. These elasticities mean that if the income of Brazilians decreases, they will purchase ________ dairy and ________ fruits and vegetables.

If the price of one good increases by 3 percent and the quantity demanded of another good increases by 2 percent, the cross elasticity is ________ and the two goods are ________.

A 10 percent increase in income increases the quantity of apple juice demanded from 18,800 to 21,200 gallons. The income elasticity of demand for apple juice is

Fantastic growing conditions that produce a bumper crop of oranges on each tree this year will definitely make the short run supply of oranges more price elastic.

Suppose the price elasticity of teenagers' demand for cigarettes is 2.0. If the government imposes a tax on cigarettes that raises the price by 10 percent, by how much will it reduce teenaged smoking?

As income rises, the share of income spent on food in the United States

A hot dog vendor on a street corner could increase the quantity of hot dogs her customers demand by 12 percent if she lowers the price of a hot dog 10 percent. The demand for the hot dogs is

The price elasticity of demand for furniture is estimated at 1.3. This value means a one percent increase in the

-If the price increases by 20 percent and the quantity supplied increases by 40 percent, what does the elasticity of supply equal?

Because Product X has a very small, positive income elasticity of demand, it is likely that product X is a

The ________ the portion of your income spent on a good, the ________ is your demand for the good.

The concept of elasticity of supply measures the responsiveness of the

-The cab fare in Horseville is regulated. Recently, the government decided to raise it from $2.00 to $2.50 per ride. After this rise in fare, cab ridership decreased by 10 percent. a) What is the price elasticity of demand for cab rides in Horseville? (Use the midpoint formula to calculate the percentage change in the price.) Is the demand for rides elastic or inelastic? b) According to your estimate, what happened to the cab drivers' revenue after the fare rose? Explain. c) Why might your estimate of elasticity be inaccurate?

If the percentage change in quantity demanded is greater than the percentage change in price, can you determine if the demand is elastic, unit elastic, or inelastic? Explain your answer.

If a 20 percent increase in the price of a used car results in a 10 percent decrease in the quantity of used cars demanded, then the demand for used cars is

-The above table gives the demand schedule for Billy Bob's BBQ ribs. The demand for Billy Bob's ribs over the price range of $1 per pound to $3 per pound is