Exam 6: Elasticity

If the price of good X rises and the demand for good X is elastic, then the percentage __________ in quantity demanded is __________ the percentage rise in price, and total revenue __________.

The producer of good X is contemplating a price change and has asked for your advice. After some empirical investigation, you conclude that the price elasticity of demand for good X is 0.75. Your best advice to the producer would be to

If price elasticity of demand is 0.5, it follows that a _______ percent decrease in price would cause a _______ percent increase in quantity demanded.

Exhibit 19-5 ​ Refer to Exhibit 19-5. For graph (3), what is the price elasticity of demand going between $2.00 and $1.50?

As the price of good X rises from $1.50 to $1.75 the result is a decrease in the quantity demanded of good X from 650 units to 590 units. The price elasticity of demand for good X is _____________ and total revenue __________ as the price of good X rises from $1.50 to $1.75.

If a good is income elastic, it follows that the percentage change in quantity demanded of a good

Exhibit 19-2 ​ Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. Approximately what percentage of the tax do consumers end up paying?

Price elasticity of demand is the ratio of the

Cross elasticity of demand is the percentage change in the quantity __________ of a good divided by the percentage change in __________.

For a straight-line downward-sloping demand curve, price elasticity of demand

If Jack bought 12 DVDs last year when his income was $40,000 and he buys 14 DVDs this year when his income is $43,000, then his income elasticity of demand is ______________ which means that DVDs are a(n)______________ good for Jack.

Government wants to maximize its tax revenue and it can only place a $2 per-unit tax on one of two goods. It should place the tax (on the production)of the good whose demand curve has the

As the price of a good falls from $5 to $3, the quantity supplied of the good falls from 550 units to 400 units. Price elasticity of supply is

Suppose that when the price of a good rises from $12 to $14, the quantity demanded of that good falls from 220 units to 180 units. What is the approximate price elasticity of demand between these two prices?

The longer the period of time allowed for the producer of a good to adjust to a change in the price of the good, the ____________ the price elasticity of supply will be.  This statement assumes that the quantity supplied __________ be altered with time.

If Cassandra bought 12 blouses last year when her income was $46,000 and she buys 14 blouses this year when her income is $52,000, then her income elasticity of demand for blouses is approximately

Suppose that when the price of water rises by 30 percent, the quantity demanded falls by 10 percent. The price elasticity of demand for water is ____________, making water an _______________ good (in this example).

If tobacco is a normal, income inelastic good, it follows that a 10 percent decrease in income will __________ quantity demanded by __________ than 10 percent.

All other things being equal, the __________ substitutes for a good, the __________ the good's price elasticity of demand tends to be.

The more narrowly defined a good is, the more elastic the demand for the good will tend to be,  ceteris paribus .