Exam 5: Elasticity and Its Application

The federal government is concerned about obesity in the United States.Congress is considering two plans.One will ban the production and sale of "junk food." The other will increase nutrition-education programs and include substantial advertising campaigns to encourage healthy eating habits.The junk-food ban program

Frequently,in the short run,the quantity supplied of a good is

Suppose a producer is able to separate customers into two groups,one having an inelastic demand and the other having an elastic demand.If the producer's objective is to increase total revenue,she should

Figure 5-17 -Refer to Figure 5-17.Which of the following statements is not correct?

If the demand for donuts is elastic,then a decrease in the price of donuts will

If a t-shirt manufacturer supplies 1,000 t-shirts per week when the price of t-shirts is $10 and supplies 1,200 t-shirts per week when the price of t-shirts is $12,the price elasticity of supply is 2.

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

Scenario 5-3 Milk has an inelastic demand, and beef has an elastic demand. Suppose that a mysterious increase in bovine infertility decreases both the population of dairy cows and the population of beef cattle by 50 percent. -Refer to Scenario 5-3.The equilibrium price will

Figure 5-10 -Refer to Figure 5-10.When price falls from $50 to $40,demand is

The flatter the demand curve through a given point,the

Which of the following statements about the consumers' responses to rising gasoline prices is correct?

Which of the following is likely to have the most price inelastic demand?

Figure 5-5 -Refer to Figure 5-5.At a price of $12 per unit,sellers' total revenue equals

Supply is said to be inelastic if the quantity supplied responds substantially to changes in the price and elastic if the quantity supplied responds only slightly to price.

If the income elasticity of demand for a good is negative,then the good must be an inferior good.

If the demand for textbooks is inelastic,then an increase in the price of textbooks will

At price of $1.30 per pound,a local apple orchard is willing to supply 150 pounds of apples per day.At a price of $1.50 per pound,the orchard is willing to supply 170 pounds of apples per day.Using the midpoint method,the price elasticity of supply is about

The midpoint method is used to calculate elasticity between two points because it gives the same answer regardless of the direction of the change.

When the price of knee braces increased by 25 percent,the Brace Yourself Company increased its quantity supplied of knee braces per week by 75 percent.BYC's price elasticity of supply of knee braces is 0.33.

At price of $1.20,a local pencil manufacturer is willing to supply 150 boxes per day.At a price of $1.40,the manufacturer is willing to supply 170 boxes per day.Using the midpoint method,the price elasticity of supply is about