Exam 4: Elasticity

How does the price elasticity of demand at relatively high prices compare to the price elasticity of demand at relatively low prices? Calculate the price elasticity from $5 to $6 and the price elasticity from $1 to $2 in the accompanying graph.

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

If the price elasticity of demand is -4.0,a 5 percent decrease in price will increase quantity demanded by

If the percentage change in the quantity consumed of pizza is 8 percent and the percentage change in income is 2 percent,what is the income elasticity of demand for pizza?

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

What does the price elasticity of demand measure?

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

If the cross-price elasticity between Good A and Good B is -1.5 and the percentage change in quantity demanded of Good B is 15 percent,what is the percentage change in the price of Good A?

Refer to the accompanying table to answer the following questions. -The price of erasers increases from $0.50 to $1.00 per eraser.Using the midpoint method,what is the cross-price elasticity of demand between pencils and erasers?

Cell phone companies found that when they raised the price of connecting to wireless hot spots,demand decreased more than proportionally among casual users but decreased less than proportionally among businesspeople.This is because wireless connectivity is a(n)________ good for casual users but a(n)________ good for businesspeople.

When the price of erasers increases from $1.50 to $2.50,the quantity demanded of pencils is unchanged.The cross-price elasticity of demand between erasers and pencils is ________ because erasers and pencils are ________.

Firms supplying twisty-ties decrease the quantity supplied of inputs by 10 percent when the price decreases by 5 percent.The price elasticity of supply for twisty-ties is

The introduction of new gaming systems that can compete effectively with the Nintendo console will make the demand for the Nintendo console become

Shawna wins the lottery and her income increases by 60 percent.She used to buy 10 pints of cottage cheese per month and now she buys 12 pints.Her income elasticity of demand for cottage cheese is ________,making it a(n)________ good.

A shopping mall owner is given a list of income elasticity of demand values.Which one represents a necessity?

Use the accompanying graph to answer the following questions. a.A study shows the many health benefits of eating eggs for breakfast.Demand rises by 6 units at each price.Draw this on the graph. b.What is the percentage change in equilibrium price for eggs? c.If the percentage change in quantity demanded for toast decreased by 1/2 of what you found in part (b)for eggs,what is the cross-price elasticity of demand for eggs and toast? d.Will this be positive or negative? Are eggs and toast related to each other?

The local bakery calculates the price elasticity of demand for its cinnamon rolls to be -1.25.This tells the owners that demand is ________ and price is ________ to the buyer.

If the price elasticity of demand for Good A is -0.2 and the price increases from $2.25 to $2.75,the percentage change in the quantity demanded of Good A is

While there are many pizza places in Kutztown,Pappy's Pizza is known for its distinctive deep-dish pizza with an almost pie-like crust,whereas Momma's Pizza is comparable to many other restaurants.Pappy's is likely to find that it can ________ prices to increase total revenue,and Momma's must ________ prices to increase total revenue.

When the price of softballs is high,a ________ in price will raise total revenue.When the price is low,the seller should ________ the price to increase total revenue.