Exam 5: Price Elasticity of Demand and Supply

If two goods were to become even stronger substitutes than before, an economist would expect the cross elasticity to become:

If the price elasticity of demand coefficient equals 2, this means a 10 percent increase in price will result in a 20 percent decrease in the quantity demanded.

Demand price elasticity is measured by the:

Which of the statements below does not describe a demand curve that is unit elastic?

If the government wants to raise tax revenue and shift most of the tax burden to the consumers, it would impose a tax on a good with a:

Assuming the demand curve is more elastic (flatter) than the supply curve, which of the following is true?

Goods with few available substitutes tend to have inelastic demand curves. ​ ​ ​ ​

If the income elasticity of demand for a good is negative, the good is an inferior good. ​ ​

Over the elastic portion of a demand curve, a decrease in price causes:

Which of the following is true for a lower price elasticity of demand coefficient?

Which of the following goods is likely to have the most elastic demand curve?

Any change in price along a perfectly inelastic demand curve produces:

If demand is perfectly inelastic, then the demand curve will be vertical. ​

Good A has a price elasticity of demand of .27, while good B has a price elasticity of demand of 2.9. To raise the most tax revenue, the government should:

The demand for a product is likely to be more elastic:

As shown in Exhibit 3-10, the $1 per pack tax on cigarettes raises tax revenue per day totaling:​

If the price of Pepsi-Cola increases from 40 cents to 50 cents per bottle and the quantity demanded decreases from 100 bottles to 50 bottles, then according to the averaging equation, the value of price elasticity of demand for Pepsi-Cola is:

If the price elasticity of demand for football tickets is estimated to be 4.5, then a 10 percent increase in football ticket prices would be expected to cause a:

Governments can use price elasticity of demand to estimate how changes in excise tax rates will affect:

If the percentage change in the quantity demanded of a good is less than the percentage change in price, price elasticity of demand is: