Exam 5: Elasticity

If along a given segment of a demand curve price falls and total revenue ____________, then demand is price inelastic along that segment.

The price elasticity of demand for ground beef has been estimated to be -1.0. If mad cow disease strikes the United States and a large percentage of the cattle are removed from the market, how will that affect total expenditures on hamburger, all other things unchanged?

The cross price elasticity of demand for poultry with respect to the price of ground beef has been estimated to be 0.23. If the price of ground beef falls by 20 percent in a period, how will that affect the demand for poultry in that period, all other things unchanged?

If a demand curve has a price elasticity coefficient equal to negative 1 throughout, then the slope of the demand curve is also negative 1 throughout.

If demand is price inelastic, a change in price in either direction (up or down) causes:

If an increase in income leads to a decrease in the demand for a good, then the good is said to be:

If demand is unit price elastic, a change in price causes:

If a good is a necessity with few substitutes, then the price elasticity of demand will tend to be:

Which of the following is not true regarding a price elastic demand curve?

If the percentage change in quantity demanded is greater than the percentage change in price, the demand curve has unit price elasticity.

-(Exhibit: Estimating Price Elasticity) Between the two prices, P₁ and P₂, which demand curve has the lowest price elasticity (absolute value)?

The income elasticity of demand for eggs has been estimated to be 0.57. If income grows by 5 percent in a period, how will that affect demand for eggs in that period, all other things unchanged?

The ratio of the percentage change in the quantity demanded to the percentage change in price, all other things unchanged, is:

Assume the supply curve shifts to the right by a given amount at each price. Price in the market will decline the most if demand is more:

If a decrease in the price of a good causes an increase in total revenue, the demand for the good is price inelastic.

When a public transit system (such as a subway or bus line) raises its fares, it may experience an increase in total revenue. This suggests that demand is:

If income increases and the consumption of bagels increases, bagels are considered a(n):

If total revenue goes up when price falls, the price elasticity of demand is said to be:

The price elasticity of a demand curve with a constant slope:

The income elasticity of demand for ground beef has been estimated to be -0.197. If income falls by 20 percent in a period, how will that affect demand for ground beef in that period, all other things unchanged?