Exam 4: Elasticity

Assume that a family spends 35% of its income on housing,20% on travel-related expenses,10% on utilities,25% on health care,and 5% on miscellaneous items.Demand for which category will be most responsive to a change in price?

When the price increases by 30% and the quantity demanded drops by 30%,the price elasticity of demand is:

When the price of scooters drops by 5%,the quantity demanded changes by 20%.You know that the price elasticity of demand for scooters is:

Which one of the following pairs of goods is likely to have a positive cross-price elasticity of demand?

Refer to the accompanying table.The price elasticity of demand of erasers is __________ when the price is lowered from $1.50 to $1.00.Sellers of erasers will __________ their total revenue from this price change.

What good is most likely to have a negative income elasticity of demand?

Refer to the accompanying table.When the price drops from $5 to $3,price elasticity of demand for sushi (using the midpoint method)at an income of $30,000 is:

If the price elasticity of supply is 1.5,we know that supply is:

The initial price of picture frames is $6 and suppliers offer 20 frames.When the price falls to $4,suppliers offer only 10.The price elasticity of supply is:

When would oil producers see the largest percentage decline in the quantity demanded for oil due to an increase in the price of oil today?

Howard buys 5 suits a year when he earns $70,000.When his income increases to $200,000,he buys 15 suits a year.From the midpoint method,his income elasticity of demand for suits is:

The income elasticity of demand for a good measures the responsiveness of ________ to a change in ________.

Winged Wonders is a specialty store that sells butterfly ornaments.The owner wants to increase her total revenue and knows that the price elasticity of demand for her product is -0.4.What should she do to her price?

Used car dealers find that their sales rise in a recession.We can be certain that consumers view used cars as:

When you change your quantity demanded of one good because of a change in price of another good,you are acting according to the principle of:

If the cross-price elasticity of demand is 6,Good A and Good B are:

The price elasticity supply of doctors could be considered ________ because it takes a minimum of four to six years of training to be able to work as a physician.

Robert's Furniture produces high-quality wooden bedroom sets that take approximately 4 months to make,from start to finish.The price elasticity of supply for these bedroom sets in the short term is:

The percentage change in price is 5%,while the price elasticity of supply is 0.The percentage change in quantity supplied:

Graph the following situations: a.My cats love Kitty Kat Treats,and I will buy as much as the store has at the current price of $2.But when the price of Kitty Kat Treats increases by even 5 cents,I won't buy any! b.I will buy 20 bags of Kitty Kat Treats at any price. c.If the price of Kitty Kat Treats rises by 5%,I'll decrease my quantity demanded by 10%.