Exam 4: Elasticity

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If the cross elasticity of demand for good x with respect to the price of good y is positive, then goods x and y are

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  -The figure above represents the behavior of total revenue as price falls along a straight-line demand curve. Unit elasticity of demand occurs at -The figure above represents the behavior of total revenue as price falls along a straight-line demand curve. Unit elasticity of demand occurs at

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In 1973 and again in 1979, the Organization of Petroleum Exporting Countries (OPEC) raised the world price of crude oil and increased their revenue as well. Which of the following is a TRUE statement regarding these OPEC price hikes?

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The price elasticity of demand can range between

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  -The increase in the demand for widgets, shown in the figure above, is the result of an increase in income. Therefore, widgets -The increase in the demand for widgets, shown in the figure above, is the result of an increase in income. Therefore, widgets

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"Last October, due to an early frost, the price of a pumpkin increased by 10 percent compared to the price in the previous Halloween season. As a result, the quantity demanded county-wide decreased from 2 million to 1.5 million." Based on this statement, it is certain that the

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  -The figure above illustrates a linear demand curve. In the range from $8 to $6 -The figure above illustrates a linear demand curve. In the range from $8 to $6

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A straight-line demand curve with negative slope intersects the horizontal axis at 200 tons per week. The point on the demand curve at which the price elasticity of demand is 1 corresponds to a quantity demanded

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If the price of a soda increases from 75¢ to $1.00 and as a result the quantity demanded of sodas decreases from 10 to 9 per week, the elasticity of demand for sodas equals

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Redbox rents DVDs for $1 per day via self-service kiosks located across the United States. In 2007, each kiosk averaged about 50 rentals per day. Suppose Redbox increases their daily price to $1.50. What is the price elasticity of demand if rentals decrease by 20 per day?

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The income elasticity of demand for food

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  -The table above gives the demand schedule for snow peas. The price elasticity of demand between $6.00 and $7.00 per bushel is -The table above gives the demand schedule for snow peas. The price elasticity of demand between $6.00 and $7.00 per bushel is

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If the price elasticity of demand for a product equals 1, as its price rises the

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"The price elasticity of demand is constant along a straight-line demand curve." Is this statement true or false?

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If the price elasticity of demand for peanut butter is 2.4, then peanut butter

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Based on the following pieces of information, which fast food product do consumers see as the closest substitute for Wendy's Hamburgers?

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If the price of salt increases and the quantity demanded does NOT change, then

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If students' expenditures on airline travel increase as a consequence of more heavily discounted fares, students' demand for airline travel must be

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  -Suppose that business travelers and leisure travelers have the demand schedules for airline tickets from Atlanta to Philadelphia given in the table above. a) Draw both demand curves. b) As the price of tickets rises from $200 to $300, what is the price elasticity of business travelers' demand? What is the price elasticity of leisure travelers' demand? (Use the midpoint method in your calculations.) c) Why do business travelers and leisure travelers have different price elasticities of demand for airline tickets? d) At what price is the price elasticity of demand equal to 1 for business travelers? For leisure travelers? Explain. -Suppose that business travelers and leisure travelers have the demand schedules for airline tickets from Atlanta to Philadelphia given in the table above. a) Draw both demand curves. b) As the price of tickets rises from $200 to $300, what is the price elasticity of business travelers' demand? What is the price elasticity of leisure travelers' demand? (Use the midpoint method in your calculations.) c) Why do business travelers and leisure travelers have different price elasticities of demand for airline tickets? d) At what price is the price elasticity of demand equal to 1 for business travelers? For leisure travelers? Explain.

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  -The figure above shows the demand curve for pizza. Using the midpoint method and moving from point A to point B, calculate the a) percentage change in price. b) percentage change in quantity demanded. c) price elasticity of demand. -The figure above shows the demand curve for pizza. Using the midpoint method and moving from point A to point B, calculate the a) percentage change in price. b) percentage change in quantity demanded. c) price elasticity of demand.

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