Exam 4: Elasticity

Suppose a fast-food chain determines that the price elasticity of demand for its hamburgers is 1.7, 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?

FIGURE 4-2 -Refer to Figure 4-2. In diagram 1, the elasticity of demand for prices below $10 is

When the percentage change in quantity demanded is greater than the percentage change in price that brought it about, demand is said to be

FIGURE 4-2 -Refer to Figure 4-2. There is good reason to suppose that, of the four goods whose demand curves are shown in diagrams 1-4 of the figure, the good that has the fewest close substitutes is shown in

If two goods, X and Y, have a negative cross elasticity of demand, then we know that they

Suppose the cross-price elasticity of demand between raspberry jam and strawberry jam is 7.5. The interpretation of this result is that

Consider the following demand and supply schedules for some agricultural commodity. TABLE 5-2 -Consider two demand curves and the same price change for both. If the resulting percentage change in quantity demanded is greater for one D1) than the other D2), we can conclude

An upward-sloping straight-line supply curve through the origin has an elasticity of

A value of zero for the elasticity of supply of some product implies that

FIGURE 4-2 -Refer to Figure 4-2. As price decreases, total expenditure increases, reaches a maximum, and then decreases for the demand curve in diagrams)

Suppose that the quantity demanded of a good rises from 40 units to 60 units per month when the price falls from $1.05 to 95 cents per unit. The price elasticity of demand for this product is

As the price for some product increases from $4.00 to $5.00 per unit, quantity demanded decreases from 400 to 300 units per month. For this segment of the demand curve, the price elasticity of demand is

Demand Schedule for Ski Tickets TABLE 4-2 -Refer to Table 4-2. Total expenditure for ski tickets reaches a maximum at a price/quantity demanded combination of

There have been proposals that a tax be imposed on sugar-laden soft drinks in an attempt to reduce their consumption. Assume for simplicity that all bottled soft drinks are the same size. Suppose the initial market equilibrium is P = $2.00 and Q = 1000. FIGURE 4-4 -Refer to Figure 4-4. Suppose the government imposes a tax of $0.60 per soft drink purchased. Given the change in total expenditure on soft drinks after imposition of the excise tax, what do we know about the price elasticity of demand η) for soft drinks?

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

FIGURE 4-3 -Consumers will bear a larger burden of an excise tax if

If the total expenditure on clothing decreases when the price of clothing falls, the price elasticity of demand is

Suppose the cross-elasticity of demand for two goods, domestic cheese and imported cheese, is positive. If the price of imported cheese falls, then quantity demanded will

Suppose the current level of output of some good is 100 units. If market demand is inelastic at that quantity, total expenditure on this product would be higher if output was

A demand curve that is the shape of a rectangular hyperbola