Exam 6: Elasticity

Assume that pizza and hamburgers are the only food items available to consumers.If the price of pizza increases, other factors constant, then which of the following will definitely happen?

If the supply of product X is perfectly elastic, an increase in the demand for it will increase

Other things the same, if a price change causes total revenue to change in the opposite direction, demand is

What is the most likely effect of the development of rental movies and online movie streaming on the movie theater (or cinema) industry?

The price of old baseball cards rises rapidly with increases in demand because

The law of supply suggests that the price-elasticity of supply is

Suppose the price elasticity of supply for crude oil is 2.5.How much would price have to rise to increase production by 20 percent?

An auto rental company lowers the price of its rentals to increase its market share.The price cut increases quantity demanded, but total revenue decreases.This result suggests that over this price range, the demand for the auto rentals is

If the demand for a product is elastic, then

Economists distinguish among the immediate market period, the short run, and the long run by noting that

In which of the following instances will total revenue decline?

The more time consumers have to adjust to a change in price,

If the price elasticity of demand for a product is 2.5, then a price cut from $2.00 to $1.80 will

The supply curve of antique reproductions is

Which of the following goods (with their respective income elasticity coefficients in parentheses) will most likely suffer a decline in demand during a recession?

In some markets consumers may buy many different brands of a product.Which of the statements below best represents a situation where demand for a particular brand would be very elastic?

Whenever a product is put on special sale at a discounted price, total revenue from the product increases.This indicates that the coefficient of elasticity for the product is greater than 1.

A normal good would have a positive price-elasticity of demand.

The Bear Corporation finds that its total spending on machine parts increases after the price of machine parts falls, other things being equal.Which of the following is true about the Bear Corporation's demand for machine parts with the price change?

A positive cross-elasticity of demand between two goods indicates that the two goods are both normal goods.