Exam 4: Elasticity

If when income increases by 2 percent and the price does NOT change, the quantity of airplane travel demanded increases by 6 percent, then the income elasticity of demand of airplane travel is

Suppose Target decided to lower the price on all shirts as part of its Back to School promotion. The cross elasticity of demand between pants and shirts is negative. Lowering the price on shirts will ________ the demand for pants because shirts and pants are ________.

A normal good is defined as a good for which the demand curve

Joan's income has just risen from $940 per week to $1,060 per week. As a result, she decides to purchase 12 percent more lettuce per week. The income elasticity of Joan's demand for lettuce is

If the price of a good increases from $3 to $4, and the quantity demand remains unchanged, then the demand is

The income elasticity of demand for vacations is 5. If incomes increase by 3 percent next year, the quantity of vacations demanded at today's price will increase by ________ percent.

An increase in Abigail's income decreases her demand for used cars. For her, used cars are

If the price elasticity is between 0 and 1, demand is

Studies show that smoking cigars is inversely related to income. Thus cigars are an inferior good.

If the demand for KFC chicken is price inelastic, a fall in the price of KFC chicken will raise the total revenue.

-The increase in the demand for widgets, shown in the figure above, is the result of a decrease in the price of McBoover devices. Therefore

If the price of a movie ticket increases by 4 percent and the quantity of movies demanded falls by 2 percent, the price elasticity of demand is

If income increases by 2.0 percent, and quantity demanded of a good increases by 0.2 percent, the income elasticity for the good is

The quantity of new cars increases by 10 percent. If the price elasticity of demand for new cars is 1.25, the price of new cars will fall by

Marvin loves chocolate truffles. As the price of a chocolate truffle increases from $1 to $2 to $3, Marvin continues to buy a dozen chocolate truffles every week. Marvin's demand for chocolate truffles is

When the price of oranges increases from $4 to $6 per bag, the quantity demanded of oranges decreases from 800 bags to 700 bags. The price elasticity of demand over this price range is equal to

-The table above gives the supply schedule for a product. Using the midpoint method, find the price elasticity of supply between points A and B, between B and C, between C and D, and between D and E.

The price elasticity of demand ________ in value when moving downward along a ________ line demand curve.

-In the figure above, at which point (a, b, or c) along the linear demand curve illustrated would demand be a) most elastic? b) most inelastic?

Grape juice prices increased by 20 percent in 2007. Suppose in response grape growers did not increase or decrease their grape production. The elasticity of supply is best described as