Exam 4: Elasticity

Suppose the quantity supplied of computers increases from 2 million to 4 million units as the price of a computer increases from $600 to $700. What does the price elasticity of supply equal?

-The figure illustrates the demand for hamburgers. When the price is $1.00 a hamburger, the elasticity of demand is ________ and a 1 percent increase in the price will ________ the quantity of hamburgers demanded by ________ percent.

If the demand for a good is unit elastic

The income elasticity of demand is defined as the percentage change in

The price elasticity of demand is always positive, as is the price elasticity of supply. Is the cross elasticity of demand always positive? Explain your answer.

Water is considered a necessity. So, is the demand for water elastic or inelastic?

Last year the price of corn was $3 per bushel and the quantity of corn demanded was 8 million bushels. This year the price of corn is $4 per bushel and the quantity of corn demanded is 7 million bushels. Assuming that the demand curve has not shifted, what is the price elasticity of demand for corn? (Use the midpoint formula.)

Last year, Jack's income was $15,000 and he bought 50 bags of potato chips. This year his income is $18,000 and he buys 55 bags of potato chips. Therefore, Jack's

A decrease in the price of eggs from $1.50 to $1.30 per dozen resulted in an increase in egg purchases in two cities. In Philadelphia, daily egg purchases increased from 6000 to 8000 dozens; in nearby Dover, Delaware, daily egg purchases increased from 300 to 400 dozens. The price elasticity of demand is therefore

As time passes after a change in the price, the supply of a good or service

A good with a vertical demand curve has a price elasticity of demand that

As income rises, the share of income spent on food in the United States

The price of gasoline rises by 33 percent to $3.50 a gallon and stays at that price for the next two years. The quantity of gasoline demanded two years from now will be

The price of a bus ride decreases, and the total revenue of the bus company decreases. The demand for bus rides is

Which of the following is likely to have the smallest price elasticity of demand?

-The figure illustrates the demand for eggs. At what price will egg sellers maximize their total revenue?

The price elasticity of demand for a specific model of a luxury car is likely to be

If the elasticity of supply of a good is zero, then its

The demand for Honda Accords is probably

Explain why the availability of resources affects the elasticity of supply.