Exam 6: Elasticity: the Responsiveness of Demand and Supply

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If the price of steel increases drastically, the quantity of steel demanded by the building industry will fall significantly over the long run because

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Question 61

Suppose at a price of $50, Yoshi's Jazz Bar sells 20 tickets to its nightly jazz performance and at a price of $40, it sells 25 tickets. Based on this information, the demand for Yoshi's jazz performance is elastic.

(True/False)

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Question 62

An increase in the demand for green tea raises the price of green tea from $16 a pound to $20 a pound. As a result, quantity supplied increases by 30 percent. Using the midpoint formula, what is the value of the price elasticity of supply?

(Multiple Choice)

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Question 63

The price elasticity of demand for Kellogg's Raisin Bran is larger in absolute value than the price elasticity of demand for all breakfast cereals.

(True/False)

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Question 64

In order to prove that Motrin and Ibuprofen are substitutes, one should measure the and get a .

(Multiple Choice)

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Question 65

Figure 6-4 -Refer to Figure 6-4. Which of the following statements about price elasticity of demand is true?

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Question 66

Total revenue is equal to

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Question 67

Figure 6-9 -Refer to Figure 6-9. The data in the diagram indicates that DVDs are

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Question 68

If the cross-price elasticity of demand for goods A and B is zero, this means the two goods are unrelated.

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Question 69

Figure 6-8 -Refer to Figure 6-8. Identify the two goods which are complements.

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Question 70

Most food products have low income and price elasticities of demand.

(True/False)

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Question 71

Which of the following statements is true?

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Question 72

Table 6-1 -Refer to Table 6-1. Suppose you own a bookstore. You believe that you can sell 40 copies per day of the latest John Grisham novel when the price is $35. You consider lowering the price to $25 and believe this will increase the quantity sold to 50 books per day. Compute the price elasticity of demand using the midpoint formula and these data. Select the correct implication from your work.

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Question 73

Which of the following pairs of goods is likely to have a negative cross-price elasticity of demand?

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Question 74

Suppose a decrease in the supply of bottled water results in a decrease in revenue. This indicates that

(Multiple Choice)

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Question 75

If the cross-price elasticity of demand between Breeze Detergent and Faber Detergent is a relatively large positive number, then it indicates that

(Multiple Choice)

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Question 76

The price of wheat has fallen since 1950. Which of the following explains this price decline?

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Question 77

Demand for staples such as dairy products and bread is likely to be both income and price inelastic.

(True/False)

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Question 78

If a soda tax is implemented and demand for soda is price elastic, the decline in equilibrium quantity would be and the increase in equilibrium price would be than if demand were inelastic.

(Multiple Choice)

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Question 79

Economists estimated that the cross-price elasticity of demand for beer and wine is -0.83 and the income elasticity of wine is 5.03. This means that

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Question 80

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Exam 6: Elasticity: the Responsiveness of Demand and Supply

If the price of steel increases drastically, the quantity of steel demanded by the building industry will fall significantly over the long run because

Suppose at a price of $50, Yoshi's Jazz Bar sells 20 tickets to its nightly jazz performance and at a price of $40, it sells 25 tickets. Based on this information, the demand for Yoshi's jazz performance is elastic.

An increase in the demand for green tea raises the price of green tea from $16 a pound to $20 a pound. As a result, quantity supplied increases by 30 percent. Using the midpoint formula, what is the value of the price elasticity of supply?

The price elasticity of demand for Kellogg's Raisin Bran is larger in absolute value than the price elasticity of demand for all breakfast cereals.

In order to prove that Motrin and Ibuprofen are substitutes, one should measure the ________ and get a ________.

Figure 6-4 -Refer to Figure 6-4. Which of the following statements about price elasticity of demand is true?

Total revenue is equal to

Figure 6-9 -Refer to Figure 6-9. The data in the diagram indicates that DVDs are

If the cross-price elasticity of demand for goods A and B is zero, this means the two goods are unrelated.

Figure 6-8 -Refer to Figure 6-8. Identify the two goods which are complements.

Most food products have low income and price elasticities of demand.

Which of the following statements is true?

Which of the following pairs of goods is likely to have a negative cross-price elasticity of demand?

Suppose a decrease in the supply of bottled water results in a decrease in revenue. This indicates that

If the cross-price elasticity of demand between Breeze Detergent and Faber Detergent is a relatively large positive number, then it indicates that

The price of wheat has fallen since 1950. Which of the following explains this price decline?

Demand for staples such as dairy products and bread is likely to be both income and price inelastic.

If a soda tax is implemented and demand for soda is price elastic, the decline in equilibrium quantity would be ________ and the increase in equilibrium price would be ________ than if demand were inelastic.

Economists estimated that the cross-price elasticity of demand for beer and wine is -0.83 and the income elasticity of wine is 5.03. This means that

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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In order to prove that Motrin and Ibuprofen are substitutes, one should measure the and get a .

If a soda tax is implemented and demand for soda is price elastic, the decline in equilibrium quantity would be and the increase in equilibrium price would be than if demand were inelastic.