Exam 7: Consumer Choice and Elasticity

The price of an airline ticket rises as the amount of time between purchase and flight departure gets smaller. The airlines base the policy on the assumption that

Other things constant, the price elasticity of demand for a product will tend to be smaller (more inelastic) if

Which one of the following goods would likely have the most inelastic demand?

The price elasticity of supply

Scenario 7-1 Use the information below to answer the following question(s). JoAnn considers cola and plain sparkling water to be good substitutes. Suppose the price of sugar, a key ingredient used to produce cola, falls. Refer to Scenario 7-1. According to the substitution effect, which of the following is most likely to occur?

Figure 7-15 Refer to Figure 7-15. Along which of these segments of the supply curve is supply most elastic?

If people spend 30 percent less on movie tickets when movie prices decline 15 percent, the price elasticity of demand for movie tickets at these prices must be

When a good is more broadly defined,

The demand for Chocolate Chip Cookie Dough ice cream is likely quite elastic because

Figure 7-5 Which of the following is true for the demand curve depicted in Figure 7-5?

In economic theory, the word "demand" refers to

Figure 7-9 At a price of $10, the price elasticity of the demand curve depicted in Figure 7-9 is

A car wash currently sells 30 car washes a day at a price of $5. Total daily revenue is now $150. If they lower their price to $3,

"I'm tired of eating cold pizza for breakfast. Today I'm going to the make some oatmeal instead." This statement most clearly reflects the

The difference between normal and inferior goods is that

The exhibit illustrates two possible demand curves for a product, D ₁ and D ₂. Which of the following is true regarding these demand curves?

If the quantity demanded of a product rose from 900 to 1,200 when the price of the product fell from $11 to $9, the price elasticity of demand coefficient is equal to

Suppose a city that operates local electric and natural gas companies wants to raise revenues by increasing its rates for electricity and natural gas. The price rise will increase city revenues if the elasticity of demand for electricity and natural gas is

When the price of a good falls, consumers buy more of the good because it is cheaper relative to competing goods. This statement describes the

Making drugs, such as cocaine, illegal results in a higher price than would be present if the drugs were legal. All else constant, the higher price results in drug users spending