Exam 5: Price Elasticity of Demand and Supply

Suppose the Pleasant Corporation cuts the price of its American Girl dolls by 10 percent, and as a result, the quantity of the dolls sold increases by 25 percent. This indicates that the price elasticity of demand for the dolls over this range is:

Exhibit 5-9 Supply and demand curves for good X ​ -In Exhibit 5-9, the price elasticity of supply for good X between points E and C is:

A measure of sensitivity or responsiveness to changes in price or income is called:

If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then demand is:

If the quantity demanded increases by 20 percent in response to a 10 percent decrease in price, demand is classified as:

If the price elasticity is supply coefficient is greater than one, then supply is:

In the very short-run period,

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

The price elasticity of demand between milk and soda is likely to be:

Exhibit 5-5 Demand curve for computers ​ -In Exhibit 5-5, the total revenue at point E on the demand curve equals:

If the demand curve for a good is elastic, consumers will spend more on that good when its price increases. ​

Using supply and demand analysis, which of the following is true?

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

If a 10 percent price increase causes the quantity demanded for a good to decrease by 20 percent, demand is elastic. ​

As shown in Exhibit 3-10, assume the government places a $1 per pack sales tax on cigarettes. The percentage of the burden of taxation paid by tobacco sellers is: ​

Exhibit 5-8 Supply and demand curves for good X ​ -In Exhibit 5-8, the price elasticity of supply for good X between points E and X is:

A lower price elasticity of demand coefficient occurs when:

To raise the most tax revenue, governments should consider taxing goods with:

Which of the following pairs is most likely to represent substitute goods?

Using the midpoints formula, what would be price elasticity of demand for a gallbladder operation if the number of operations fell from 6,000 to 4,000 per week after its price increased from $6,000 to $10,000?