Exam 4: Elasticity

Suppose the quantity of gasoline is measured in gallons and the price of gasoline is measured in dollars. The price elasticity of demand is 0.67. If the price of gasoline was now measured in cents rather than dollars, the price elasticity of demand would now be

If the elasticity of demand for peaches is 1.76 and the elasticity of demand for apples is 1.59, then consumers are

The larger the portion of a person's total budget spent on a good, the more inelastic the demand for the good.

-The table above gives the demand schedule for snow peas. The demand curve for snow peas is a straight line and so the elasticity of demand is

In 2012, Canadian farmers did not suffer from drought conditions that affected the United States, but they did enjoy the higher corn prices. Canadian farmers reacted to the higher price by planting more corn. Suppose that the price of corn increased by 30 percent and the Canadian farmers increased the quantity of corn they supply by 20 percent. The supply of corn 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." Calculate Jennika's price elasticity of demand for pork if she decreases her consumption by 4 percent.

If the price of suntan lotion increases from $6 to $8 per bottle and quantity demanded decreases from 900,000 bottles to 845,000 bottles, using the midpoint method, what is the price elasticity of demand for suntan lotion?

If a 5 percent increase in the price results in a 9 percent increase in quantity supplied, the elasticity of supply is

Refining gasoline for our cars requires a very specialized resource, crude oil. As a result, the

-The figure illustrates the demand for magazines. Newsagents will maximize their total revenue when they

If the elasticity of supply of TV sets is equal to 3, then a 10 percent increase in the price of a TV will

The elasticity of demand for Dell computers is probably

Studies have shown that the price elasticity of demand for necessities, such as food, are higher in developing countries and lower in developed countries. What is the reason for this difference in elasticity?

Fred's income has just risen from $940 per week to $1,060 per week. As a result, he decides to purchase 9 percent more steak per week. The income elasticity of Fred's demand for steak is

The income elasticity of demand for movies in the United States is 3.41. If people's incomes decrease by 1 percent, what is the decrease in the quantity of movies demanded?

-The table above gives Sharon's demand for ground beef at two different income levels. Use the midpoint method in this problem. a) What is the percentage change in Sharon's income? b) What is the percentage change in the quantity demanded? c) What is Sharon's income elasticity of demand for ground beef? d) Is ground beef a normal or an inferior good for Sharon?

The demand for a good is more price inelastic if

Goods and services that can be produced by using commonly available resources that could be allocated to a wide variety of alternative tasks have a supply that is

Does the fact that the price elasticity for food is inelastic violate the law of demand?

Suppose Carol's Candid Cameras wants to increase its total revenue. If the firm lowers the price of cameras by 2 percent, Carol must be predicting that the quantity