Exam 5: Elasticity and Its Application

Table 5-5 The following table shows a portion of the demand schedule for a particular good at various levels of income. -Refer to Table 5-5.Using the midpoint method,when income equals $7,500,what is the price elasticity of demand between $16 and $20?

In the early 1970s,OPEC's goal was to

When the price of a bracelet was $25 each,the jewelry shop sold 20 per month.When it raised the price to $35 each,it sold 14 per month.Using the midpoint method,the price elasticity of demand for bracelets is about

A linear,upward-sloping supply curve has

Supply and demand both tend to be more elastic in the long run and more inelastic in the short run.

Income elasticity of demand measures how

The flatter the demand curve that passes through a given point,the more elastic the demand.

A government program that reduces land under cultivation hurts farmers but helps consumers.

Figure 5-4 -Refer to Figure 5-4.Assume the section of the demand curve from A to B corresponds to prices between $6 and $12.Then,when the price increases from $8 to $10,

Suppose the price of potato chips decreases from $1.45 to $1.25 and,as a result,the quantity of potato chips demanded increases from 2,000 to 2,200.Using the midpoint method,the price elasticity of demand for potato chips in the given price range is

When the price of good A is $50,the quantity demanded of good A is 500 units.When the price of good A rises to $70,the quantity demanded of good A falls to 400 units.Using the midpoint method,the price elasticity of demand for good A is

Suppose that 50 hot dogs are demanded at a particular price.If the price of hot dogs rises from that price by 5 percent,the number of hot dogs demanded falls to 48.Using the midpoint approach to calculate the price elasticity of demand,it follows that the

Figure 5-6 -Refer to Figure 5-6.Which of the following price changes would result in no change in sellers' total revenue?

Which of the following was not a reason OPEC failed to keep the price of oil high?

Figure 5-3 -Refer to Figure 5-3.Using the midpoint method,what is the price elasticity of supply between $25 and $35?

Demand for a good is said to be inelastic if the quantity demanded increases slightly when the price falls by a large amount.

If the price elasticity of demand for a good is 0.25,then a 20 percent decrease in price results in a

Goods with many close substitutes tend to have

When quantity demanded responds strongly to changes in price,demand is said to be

Table 5-4 -Refer to Table 5-4.Demand is unit elastic when quantity demanded changes from