Exam 5: Elasticity and Its Application

Figure 5-8 -Refer to Figure 5-8.For prices above $5,demand is price

If the quantity supplied is the same regardless of price,then supply is

If we observe that when the price of chocolate increases by 10%,total revenue increases by 10%,then the demand for chocolate is unit price elastic.

If demand is price inelastic,then

Suppose that Juan Carlos is filling out a survey that he received in the mail.The survey asks him what he would do if the price of his favorite toothpaste increased.Juan Carlos reports that he would switch to a different brand.The survey asks what he would do if the price of all toothpastes increased.Juan Carlos reports that he must use toothpaste,so he would have to adjust his spending elsewhere.These examples illustrate the importance of

If the price of walnuts rises,many people would switch from consuming walnuts to consuming pecans.But if the price of salt rises,people would have difficulty purchasing something to use in its place.These examples illustrate the importance of

When demand is perfectly inelastic,the demand curve will be

Studies indicate that the price elasticity of demand for beer is about 0.9.A government policy aimed at reducing beer consumption changed the price of a case of beer from $10 to $20.According to the midpoint method,the government policy should have reduced beer consumption by

Table 5-1 -Refer to Table 5-1.Using the midpoint method,demand is unit elastic when quantity demanded changes from

A government program that pays farmers not to plant corn on part of their land can help farmers not only through the subsidy payments to farmers who participate in the program but also by raising the market price of corn.

The price elasticity of supply measures how much

Charles purchases 20 basketball tickets per year when his annual income is $50,000 and 25 basketball tickets when his annual income is $60,000.Charles's income elasticity of demand for basketball ticket is

The cross-price elasticity of garlic salt and onion salt is -2,which indicates that garlic salt and onion salt are substitutes.

Figure 5-4 -Refer to Figure 5-4.If the price increases in the region of the demand curve between points A and B,we can expect total revenue to

Figure 5-3 -Refer to Figure 5-3.Which demand curve is unit elastic?

Which of the following expressions can be used to compute the price elasticity of demand?

Figure 5-14 -Refer to Figure 5-14.Along which of these segments of the supply curve is supply most elastic?

Elasticity is

The demand for gasoline will respond more to a change in price over a period of five weeks than over a period of five years.

Figure 5-12 -Refer to Figure 5-12.If rectangle D is larger than rectangle A,then