Exam 20: Elasticity

Exhibit 20-6 -Refer to Exhibit 20-6.Suppose the three equilibrium quantities are 700,800,and 900,and the two other equilibrium prices are $2.20 and $2.75.What is the change in total revenue when a per-unit tax shifts S₁to S₂,given that D₂ is the relevant demand curve?

If total revenue falls as a result of a decrease in price,it follows that demand is

Exhibit 20-4 -Refer to Exhibit 20-4.As a consequence of the depicted change in the supply of X,the demand curve for Y shifted from D₁ to D₂.Which of the following pairs of goods are most likely represented by X and Y?

The demand curve for good X is a straight downward-sloping line.It follows that the demand for good X is ________ elastic at __________ prices than at __________ prices.

Exhibit 20-8 -Refer to Exhibit 20-8.The market for good X is initially at point A.A tax is then placed on the production of good X.It follows that the tax is equal to

For a straight-line,downward-sloping demand curve,price elasticity of demand

If Jack bought 18 CDs last year when his income was $20,000 and he buys 19 CDs this year when his income is $25,000,then for Jack CDs are

If the cross elasticity of demand for good A with respect to good B is +2.7,then good A is

Exhibit 20-1 -Refer to Exhibit 20-l.The demand curve D₂ is

Exhibit 20-2 -Refer to Exhibit 20-2.The market for good X is initially in equilibrium at $5.The government then places a per-unit tax on good X,as shown by the shift of S₁ to S₂.As a result,

If goods A and B have a cross elasticity of demand that is positive,this is evidence that goods A and B are __________ goods.

If supply is perfectly inelastic,it follows that a

If the cross elasticity of demand for good A with respect to good B is -0.87,then good A is

If for good Z income elasticity is less than 1 but greater than zero,then demand for good Z is income __________,and good Z is a(n)__________ good.

Exhibit 20-7 -Refer to Exhibit 20-7.Which of the graphs shows a perfectly elastic demand curve?

The longer the period of time allowed for the producer of a good to adjust to a change in the price of the good,the ____________ the price elasticity of supply will be. This statement assumes that the quantity supplied __________ be altered with time.

Advertisers try to make consumers feel more connected to their product so that the consumers perceive there to be fewer substitutes for the product. Ideally (from the advertiser's perspective)this will ____________ the price elasticity of demand for the product to the point where demand is ____________ resulting ultimately in higher profits.

Exhibit 20-8 -Refer to Exhibit 20-8.The market for good X is initially at point A.A tax is then placed on the production of good X.As a result,the equilibrium price changes to __________,and sellers now receive __________ per unit they sell and they get to keep __________ for each unit they sell.

All other things being equal,the __________ substitutes for a good,the __________ the price elasticity of demand.

Explain the difference between price elasticity of demand and the slope of a demand curve.