Exam 6: Elasticity: the Responsiveness of Demand and Supply

The price elasticity of supply for umbrellas is 2. Suppose you're told that following a price increase, quantity supplied increased by 30 percent. What was the percentage change in price that brought this about?

If an 8 percent decrease in the price of lobster leads to a 15 percent decrease in the quantity of lobster supplied, then the supply of lobster is

If the percentage increase in price is 15 percent and the value of the price elasticity of demand is -3, then quantity demanded

Table 6-6 -Refer to the Article Summary. How would the Pantages Theater know if it was operating on the elastic portion of the demand curve for 'Hamilton' tickets?

During an economic expansion as consumer incomes rise, holding everything else constant

Which of the following goods would have the most inelastic demand?

The process involved in bringing oil to world markets can take years. Substitutes for oil-based products such as gasoline are limited. As a result

If the absolute value of the price elasticity of demand for aspirin equals 0.8 then

Suppose you have surveyed a few industries and obtained information about the income elasticity of demand for their products. If you expect that the economy is headed for a long recession, you would advise people to look for jobs in an industry with

Jaycee Jeans sold 40 pairs of jeans at a price of $40. When it lowered its price to $20, the quantity sold increased to 60 pairs. Calculate the absolute value of the price elasticity of demand. Use the midpoint formula.

If the price elasticity of demand for insulin is equal to zero then the demand curve for insulin is

The value of the price elasticity of supply depends primarily on how quickly firms can acquire inputs to increase quantity supplied when price increases.

The price elasticity of supply is equal to

Table 6-3 -Refer to Table 6-3. Over what range of prices is the demand elastic?

If tolls on a toll road can be raised significantly before commuters will consider using a free alternative, then an increase in tolls will result in

If the price elasticity of demand for canned soup is estimated at -1.62. What happens to sales revenue if the price of canned soup rises?

Suppose the demand for milk is relatively inelastic. What happens to sales revenue if the government imposes a price floor above the free-market equilibrium price in the market for milk?

Explain the concepts of cross-price elasticity of demand and income elasticity of demand. What do positive and negative values indicate for each of these demand elasticities?

If a supply curve is a horizontal line, supply is said to be

The larger the share of a good in a consumer's budget, holding everything else constant, the