Exam 5: Elasticity

Refer to the information provided in Figure 5.2 below to answer the question(s) that follow. Figure 5.2 -Refer to Figure 5.2. If the price of a hamburger increases from $6 to $8, the price elasticity of demand equals ________. Use the midpoint formula.

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. After the tax, store owners are willing to sell ________ pumpkins at a price of ________ each.

At a price of $20, a store can sell 24 picture frames a day. At a price of $18 the store can sell 33 picture frames a day. Since total revenue ________ by the price decrease, demand must be ________.

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

A government is considering levying an alcohol tax to raise revenue to finance health care benefits. People for the tax argue that alcohol demand is price inelastic. Which of the following statements is true?

Related to the Economics in Practice on p. 105: Researchers found that a ten percent reduction in the tax rate induced a twenty percent increase in migration in Europe. This indicates that labor migration in Europe is

Refer to the information provided in Figure 5.2 below to answer the question(s) that follow. Figure 5.2 -Refer to Figure 5.2. At Point C the price elasticity of demand is -1. Along line segment AB of the demand curve, the demand is

It is possible that an increase in wages will lead to a decrease in the quantity of labor supplied.

A government wants to reduce electricity consumption by 40%. The price elasticity of demand for electricity is -10. The government must ________ the price of electricity by ________.

At a price of $11, quantity demanded is 90; and at a price of $9, quantity demanded is 110. Since total revenue ________ by the price decrease, demand must be ________.

If income decreases by 20% and, in response, the quantity of housing demanded decreases by 14%, then the income elasticity of demand for housing is

When the price of fresh fish increases 10%, quantity demanded is unchanged. The price elasticity of demand for fresh fish is

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

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 the store owners will receive per pumpkin after paying the tax is

When the price of oysters decreases 25%, quantity demanded is unchanged. The price elasticity of demand for oysters 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. Use the midpoint formula. If the price of a gardenburger decreases from $8 to $7, the price elasticity of demand equals ________ and demand is ________.

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. Along the given demand curve, which of the following is true?

For perfectly price inelastic supply,

Refer to the information provided in Figure 5.2 below to answer the question(s) that follow. Figure 5.2 -Refer to Figure 5.2. If the price of a hamburger increases from $2 to $4, the price elasticity of demand equals ________. Use the midpoint formula.

If two products are substitutes, the ________ elasticity of demand is ________.