Exam 5: Elasticities of Demand and Supply

If Pepsi goes on sale and decreases its price by 10 per cent and, as a result, the quantity demanded of Coca Cola decreases by 5 per cent, then Pepsi and Coke are ________ goods.

People eat at restaurants less often when their incomes fall because of a recession. Eating at restaurants must be

If a good has many close substitutes, then its demand is most likely

The price elasticity of demand measures the extent to which the quantity demanded changes when

If beef and pork are substitutes for consumers, the cross elasticity of demand between the two products must be

Which of the following statements is correct?

When the price of pizzas rises by 4 per cent, the quantity demanded decreases 10 per cent. What is the price elasticity of demand for pizza?

-The figure above shows the supply curve for a good with

The lower the level of income in a country, the

The cross elasticity of demand is a measure of how

When two goods are related such that an increase in the price of one good decreases the quantity demanded of the other good, these goods are definitely

Suppose the price of a silk tie rises from $45 to $55. Using the midpoint method, what is the percentage change in price?

If the price of a good rises, then moving along a demand curve the percentage change in the quantity demanded will be

Which of the following is correct?

If the percentage change in price is 10 per cent and demand is elastic, then the percentage change in the quantity demanded

Which of the following is correct? i. All linear demand curves have a constant slope and a constant price elasticity of demand. Ii) The price elasticity of demand changes while moving along a downward-sloping linear demand curve. Iii) The magnitude of the slope of all linear demand curves is equal to the price elasticity of demand.

-The figure above shows the supply curve for a good with

Suppose the Adelaide Crows football team raises ticket prices by 13 per cent and as a result the quantity of tickets demanded decreases by 21 per cent. This response means that the demand for Crows tickets is

If demand is inelastic and the price falls, the total revenue

Patrick lives near two petrol stations, Caltex and Shell. If Caltex decreases the price of petrol, we predict that the quantity of petrol demanded at Shell will