Exam 5: Elasticity and Its Application

In January the price of dark chocolate candy bars was $2.00,and Willy's Chocolate Factory produced 80 pounds.In February the price of dark chocolate candy bars was $2.50,and Willy's produced 110 pounds.In March the price of dark chocolate candy bars was $3.00,and Willy's produced 140 pounds.The price elasticity of supply of Willy's dark chocolate candy bars was about

Which of the following could be the price elasticity of demand for a good for which a decrease in price would increase revenue?

Figure 5-4 -Refer to Figure 5-4.If the price increases in the region of the demand curve between points B and C,we can expect total revenue to

There are very few,if any,good substitutes for automotive tires.Therefore,the demand for automotive tires would tend to be

The midpoint method for calculating elasticities is convenient in that it allows us to

The smaller the price elasticity of demand,the

Figure 5-7 -Refer to Figure 5-7.For prices above $8,demand is price

Scenario 5-2 The supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tax increase decreases the demand for both goods by 10%. -Refer to Scenario 5-2.The equilibrium quantity will

In general,demand curves for luxuries tend to be price elastic.

Table 5-6 -Refer to Table 5-6.Which scenario describes the market for oil in the short run in comparison to the long run?

Figure 5-10 -Refer to Figure 5-10.When the price is $30,total revenue is

If the cross-price elasticity of two goods is positive,then the two goods are

Figure 5-6 -Refer to Figure 5-6.Sellers' total revenue would increase if the price

When demand is inelastic,the price elasticity of demand is

For which of the following goods is the income elasticity of demand likely highest?

You and your college roommate eat three packages of Ramen noodles each week.After graduation last month,both of you were hired at several times your college income.You still enjoy Ramen noodles very much and buy even more,but your roommate plans to buy fewer Ramen noodles in favor of foods she prefers more.When looking at income elasticity of demand for Ramen noodles,yours would

If the price elasticity of supply for wheat is less than 1,then the supply of wheat is

In general,elasticity is a measure of

Last year,Shelley bought 6 pairs of designer jeans when her income was $40,000.This year,her income is $50,000,and she purchased 10 pairs of designer jeans.Holding other factors constant,it follows that Shelley

The income elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in income.