Exam 5: Elasticity

The owner of a local pretzel cart has estimated that if he lowers the price of pretzels from $4.00 to $3.00, he will increase sales from 800 to 1,100 pretzels per day. Using the midpoint formula, the demand for pretzels is

Refer to the information provided in Figure 5.3 below to answer the question(s) that follow. Figure 5.3 -Refer to Figure 5.3. Using the midpoint formula, if the price of a gardenburger decreases from $7 to $6, the price elasticity of demand equals ________, and the decrease results in a(n) ________ in total revenue.

Refer to the information provided in Figure 5.7 below to answer the question(s) that follow. Figure 5.7 The above figure represents the market for pumpkins both before and after the imposition of an excise tax, which is represented by the shift of the supply curve. -Refer to Figure 5.7. The amount of the tax is ________ per pumpkin.

A demand curve with continuously changing slope over all quantity values will always have a price elasticity of demand equal to infinity.

When the price of fresh fish increases 10%, quantity demanded decreases 5%. The price elasticity of demand for fresh fish is ________ and total revenue from fresh fish sales will ________.

Refer to the information provided in Figure 5.1 below to answer the question(s) that follow. Figure 5.1 -Refer to Figure 5.1. The demand for tickets is

If a decrease in income results in an increase in the quantity demanded for a product, the product is ________, and the value of the income elasticity of demand is ________.

Which of the following, if true, would most effectively undermine the argument that raising cigarette taxes reduces the number of people who smoke cigarettes?

Perfectly elastic demand has an elasticity value of zero.

Related to the Economics in Practice on page 102: Frank runs a corner delicatessen and one day decides to raise his prices by 10 percent. Total revenue is likely to ________ at the end of the first month of the higher prices since demand is relatively elastic in the ________ term.

The ABC Computer Company spends a lot of money for advertising designed to convince you that their personal computers are superior to all other personal computers. If the ABC Company is successful, the demand for ABC personal computers

Price and total revenue move in the same direction when demand is

When demand is inelastic, an increase in price will result in an increase in total revenue.

Refer to the information provided in Figure 5.1 below to answer the question(s) that follow. Figure 5.1 -Refer to Figure 5.1. The price elasticity of demand for tickets

A movie theater charges ticket prices of $4.50 during weekday afternoon matinee hours and $8.50 during evening and weekend hours. Economists explain the ticket price difference by the fact that the demand for movie tickets during the weekday afternoon matinee hours is ________ but during the evening and weekend hours it is ________.

If the elasticity of labor supply is negative, the labor supply curve would be

Refer to the information provided in Figure 5.4 below to answer the question(s) that follow. Figure 5.4 -Refer to Figure 5.4. The demand for milkshakes is unit elastic at Point C. If a store increases the price of a milkshake from P₄ to P₃, its total revenue will

If a group has a positive elasticity of labor supply, then increases in wages will result in continued increases in the quantity of labor supplied.

Cross-price elasticity of demand measures the response in the

Perfectly inelastic demand has an elasticity value of 1.