Exam 6: Elasticity

When universities announce a large tuition increase and follow it with an announcement that more financial aid will be available, they are assuming that students who pay full tuition

What is the meaning of perfectly inelastic demand and perfectly elastic demand? How would each be graphed?

If the price-elasticity coefficient for a product is 0.68 and the seller wants to raise revenues by changing its price, then the seller should cut the price of the product.

When the price of a product is increased 8 percent, the quantity demanded decreases 20 percent. The price-elasticity of demand coefficient for this product is

In which of the following instances will total revenue decline?

Suppose that a 7 percent increase in the price of normal good Y causes a 4 percent increase in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is

In interpreting the Ed value as either elastic or inelastic, we look at the

A leftward shift in the supply curve of product X will increase equilibrium price to a greater extent the

If a 6 percent decrease in the price of Good A results in an increase of 4 percent in the quantity demanded of Good B, then it can be concluded that Goods A and B are

Suppose that the price of peanuts falls from $3.5 to $2.5 per bushel and that, as a result, the total revenue received by peanut farmers changes from $12 to $13 billion. Thus,

If price and total revenue vary in opposite directions, demand is

Refer to the information. Over the $9-$7 price range, demand is

Refer to the table. Over the $8-$6 price range, supply is

In which of the following instances will total revenues decline?

Answer the question based on the following table, which shows a demand schedule. The largest decline in total revenue will occur when price falls from

The diagram concerns supply adjustments to an increase in demand (D₁ to D₂)in the immediate market period, the short run, and the long run. Supply curves S₁, S₂, and S₃ apply to the

Which of the following factors will make the demand for a product relatively elastic?

Gigantic State University raises tuition for the purpose of increasing its revenue so that more faculty can be hired. GSU is assuming that the demand for education at GSU is

Refer to the table above. What is the price that yields the maximum total revenue?

Refer to the diagram. In the P₃P₄ price range, demand is