Exam 5: Elasticity

If the price of ice cream changes by 30 percent and the quantitydemanded changes by 75 percent, what is the absolute value ofdemand elasticity?

Which good below might be expected to have the most inelasticdemand curve?

Economic theory suggests that permanent gun buybackprograms:

If the price of Good Y falls from $10 to $8, and the quantitysupplied of Good Y falls from 1,000 units to 600 units, the priceelasticity of supply is:

When a shift in demand or supply occurs, economists can makea quick prediction of the change in price. The denominator ofthe simple price-change formula is the:

If the demand curve is inelastic then an increase in price wouldcause:

Drug prohibition is likely to increase drug-industry revenuebecause the demand for drugs is inelastic.

(Figure: Slave Redemption with Perfectly Elastic Supply) Referto the figure. Suppose the supply curve is perfectly elastic as itis in the graph, a rise in the demand for slaves (from D₁ to D₂)causes:

If the government raises the minimum wage by 6 percent, thenumber of people employed falls by 2%. What is the elasticityof employment with respect to the minimum wage?

Assume a product has a rather elastic demand curve. If theproducer of the good raises the price of the product, thatproducer's total revenue will always decrease.

If the cross-price elasticity of demand of two goods is negative,we can conclude that the two goods are:

The per-unit cost of producing Tic Tac candy does not changewith increases in production, which means the:

Farmers can produce more milk at lower cost, but Americanswant to drink only so much milk. This suggests that the demandcurve for milk is:

Figure: Slave Redemption (Figure: Slave Redemption) Refer to the figure. When slaveredeemers enter the market, the total number of freed slaves is________ and the net number of freed slaves is ________.

Supply tends to be ________ in local markets, and ________ inglobal markets.

Since the demand for illegal drugs is quite inelastic, an increasein the price of illegal drugs:

If the price of Good Y falls from $10 to $8, and the quantitydemand of Good Y rises from 1,000 units to 1,200 units, theprice elasticity of demand is:

(Figure: Elasticity of Supply) Refer to the figure. Which supplycurve is the most inelastic?

The elasticity of demand for cigarettes is more inelastic in thelong run than in the short run because it takes a long time forsome people to quit smoking.

(Figure: Calculating Elasticities) Refer to the figure. Theelasticity of demand in the left panel is ________ the elasticity ofdemand in the right panel.