Exam 4: Elasticity

What does the following statement imply about price elasticity of demand? ʺAn unexpected spike in world oil prices leads to dramatic increase in revenue for the worldʹs oil producers.ʺ

Consider the following data for a hypothetical economy. TABLE 4-3 -Refer to Table 4-3.The income elasticity of demand for gasoline in this economy is

The table below shows the demand schedule for museum admissions in a small city. TABLE 4-1 -Refer to Table 4-1.Between the prices of $8 and $10,the elasticity of demand is

Nancyʹs income has just risen from $950 per week to $1050 per week.As a result,she decides to double the number of movies she attends each week.Nancyʹs demand for movies is

If the demand for some good fluctuates,but supply is constant,then which of the following combinations would generally yield the greatest price fluctuations?

If the total revenue of producers rises for an initial cut in the price of their product but falls for further reductions in price,the price elasticity of demand for the product

Which of the following statements about price elasticity of demand is true?

Given that elasticity of supply changes over time,in the short run an increase in demand will generally cause

Every month Olivier buys exactly 6 take-out pizzas even though the price may fluctuate significantly.Apparently,Olivierʹs price elasticity of demand for take-out pizza is

Suppose empirical analysis concludes that the income elasticity of demand for Kraft Dinner (KD)is -0.2.The interpretation of this result is that

Which of the following situations could explain why product X has a relatively high price elasticity of demand in the short run?

Consider an excise tax imposed on daily parking charges in the downtown of a small city.Before the imposition of the tax,equilibrium price and quantity are $15 and 100 cars parked.(P = $15,Q = 100).The city government imposes a tax of $3 per car parked per day.Market equilibrium adjusts to P = $16 and Q = 95.How much tax revenue does the city government collect per day?

The elasticity of supply for a given commodity is calculated as

If the demand for a product has an income elasticity of -3.4,we can conclude that

Suppose Statistics Canada reports that total income earned by Canadian barley farmers has declined as a result of a partial crop failure that has driven up the Canadian price of barley.We can conclude that the price elasticity of demand for barley in Canada is

Suppose the cross elasticity of demand for two goods,X and Y,is positive.If the price of Y falls,then quantity demanded will

When national income falls,sales of vacation packages also fall,even at constant prices.This fact suggests that the ________ elasticity of demand for vacation packages is ________.

Consider an excise tax imposed on daily parking charges in the downtown of a small city.Before the imposition of the tax,equilibrium price and quantity are $15 and 100 cars parked per day.(P = $15,Q = 100).The city government then imposes a tax of $3 per car parked per day.Market equilibrium adjusts to P = $16 and Q = 95.Which of the following statements about the burden of the tax is correct?

Suppose a fast-food chain determines that the price elasticity of demand for its hamburgers is 0.75,and the price of the hamburger is currently $4.00.What will be the effect on quantity demanded and total expenditure on this chainʹs hamburgers if the price is increased to $6.00?

The price elasticity of demand measures the responsiveness of