Exam 6: Elasticity

If the demand for golf is price-inelastic and your local public golf course increases the greens fees for using the course, you would expect: A.a decrease in total revenue received by the course. B.an increase in total revenue received by the course. C.an increase in the amount of golf played on the course. D.no change in the amount of golf played on the course.

If you wanted to make sure that your calculation of elasticity between two points was the same regardless of your initial point, you would use: A.the absolute value of elasticity. B.supply elasticity. C.the midpoint formula calculation of elasticity. D.the point formula calculation of elasticity.

When the price of chocolate-covered peanuts decreases from $1.10 to $0.95, the quantity demanded increases from 190 bags to 215 bags.If the price is $1.10, total revenue is ______, and if the price is $0.95, total revenue is _. A.$209; $204.25 B.$209; $236.50 C.$236.50; $209 D.$180.50; $209

If the price elasticity of demand is calculated to be 3/4, then demand is: A.-inelastic. B.price-elastic. C.price unit-elastic. D.positively sloped.

If the price of chocolate-covered peanuts decreases from $2.00 to $1.55 and the quantity demanded increases from 180 bags to 220 bags, then the price elasticity of demand (using the midpoint method) is:

It is very difficult for Julia to find inexpensive and available inputs for her business.Because of this, we predict that Julia's price elasticity of supply is: A.elastic. B.inelastic. C.unit-elastic. D.perfectly elastic.

The price elasticity of demand for a good such as water is likely to be very low because: A.the price is a small percentage of most budgets. B.water has some good substitutes. C.water is considered a luxury. D.the share of income spent on water is large.

If an increase in the price of cotton increases total revenue, then the price effect is ________ the quantity effect. A.equal to B.stronger than C.weaker than D.not comparable to

The pair of items that is likely to have the highest cross-price elasticity of demand is: A.baseball and baseball glove. B.spaghetti and meatballs. C.coffee and tea. D.peanut butter and jelly.

Figure: The Demand Curve for Crossings (Figure: The Demand Curve for Crossings) Look at the figure The Demand Curve for Crossings.This graph examines the demand for crossing a bridge over a very large river.Using the midpoint method, the price elasticity of demand between $0.90 and $1.10 is approximately:

Suppose the cross-price elasticity between demand for Burger King burgers and the price of McDonald's burgers is 0.8.If McDonald's increases the price of its burgers by 10%, then: A.Burger King will sell 10% more burgers. B.Burger King will sell 8% more burgers. C.Burger King will sell 8% fewer burgers. D.We cannot tell what will happen to Burger King, but McDonald's will sell 8% fewer burgers.

The income elasticity of demand of a normal good is:

The price elasticity of demand for gasoline in the long run has been estimated to be 1.5.If an extended war in the Middle East caused the price of oil (from which gasoline is made) to increase and remain high for a decade, how would that affect total expenditures on gasoline in the long run, all other things equal? A.Total expenditures would rise. B.Total expenditures would fall. C.Total expenditures would remain unchanged. D.There is not enough information is given to answer the question.

The price elasticity of demand is the ratio of the percent change in the quantity demanded to the percent change in the price as one moves along the demand curve.

Sonik, a local wireless phone company, tested the effect of a price reduction for text messaging.It lowered prices from $0.08 to $0.04 per message and found that the number of messages sent tripled.This means: A.the demand for text messaging is inelastic in this price range. B.the demand curve for text messaging shifted to the right. C.the supply curve of text messaging shifted to the left. D.the demand for text messaging is elastic in this price range.

Which of the following is not a factor in determining the price elasticity of demand? A.the number of available substitutes B.the time period involved C.the proportion of the budget spent on the item D.the slope of the supply curve

For a good to be considered a normal good, the_____ must be _. A.income elasticity of demand; between 1 and 0 B.cross-price elasticity of demand; less than 0 C.cross-price elasticity of demand; equal to 0 D.income elasticity of demand; greater than 0

All else equal, when the demand for oil increases, the price will increase.Some economists say that this is only a short-run worry because in the long run a more elastic supply curve will benefit consumers.Do you agree? Explain.

The price elasticity of the supply of paintings by Rembrandt is greater than 1.

(Table: Market for Pizza) If income changes from $1,000 to $1,400 per month, the income elasticity of demand at a price of $10 per pizza is: