Exam 4: Elasticity

If goods are complements, then their

If a consumer is relatively insensitive to changes in the price of a good, then the consumer's demand for the good is

"The Department of Agriculture came out today with its prediction for food price next year-4 to 5 percent increases on top of this year's already steep gains… Eggs, dairy products and cereals are up 10 percent... But the USDA says another big part of the American diet has seen only moderate price increases. Beef, poultry and pork will be up only 3 percent this year." If Raul's demand for dairy products is unit elastic, his expenditure on dairy will

The cross-elasticity of demand between Homer's Holesome Doughnuts and Krusty's Krispy Crullers is 5.0, which indicates that Homer's doughnuts and Krusty's crullers are

Of the following, demand is likely to be the most elastic for

A report shows that sales at Target stores increased in 2016 compared to the previous year. Incomes grew between 2015 and 2016. Using that fact and the sales data given above means that Target definitely is selling goods and services that

If the demand for a good is perfectly elastic, the price elasticity of demand is ________ and the demand curve is ________.

Netflix is the largest online streaming service. Currently, there are approximately 110 million subscribers. Suppose Netflix increases its price by 10 percent and observes that its total revenue increases. Based on this information, the

The supply of lettuce in the short run will be ________ than the supply in the long run and ________ than the supply today.

Which goods have more elastic demands?

-The table gives some data on the supply of roses in a small town. When the price rises from $15 a dozen to $25 a dozen, the elasticity of supply is

Which of the following goods would have the smallest elasticity of demand?

If a 20 percent increase in the price of a used car results in a 10 percent decrease in the quantity of used cars demanded, then the demand for used cars is

Is there any set of relationships between price elasticity of supply and total revenue similar to the relationships between price elasticity of demand and total revenue?

If the demand for a good is perfectly elastic, then the demand curve is horizontal.

If an increase in price results in no change in total revenue, then demand must be

Explain why the cross elasticity of demand for substitute goods is positive and the cross elasticity of demand for complements is negative.

-The increase in the demand for widgets, shown in the figure above, is the result of an increase in the price of McBoover devices from $9 to $11. Therefore, the cross-price elasticity for these two products is

Demand is unit elastic when

When demand is ________, a decrease in price ________ total revenue.