Exam 5: Elasticities of Demand and Supply

Tennis balls and tennis rackets are complements.If a 3 percent change in the price of a tennis racket leads to a 9 change in the quantity of tennis balls demanded,the cross elasticity of demand equals

-The figure above shows the demand curve for pizza.Using the midpoint method and moving from point A to point B,calculate the a.percentage change in price. b.percentage change in quantity demanded. c.price elasticity of demand.

If the cross elasticity of demand for DVD players and DVDs equals -2,then the products are

Water is considered a necessity.So,is the demand for water elastic or inelastic?

Suppose a 20 percent increase in the price of gasoline results in a 25 percent increase in the quantity supplied.This response means that gasoline has

-In the figure above,at which point (a,b,or c)along the linear demand curve illustrated would demand be a.most elastic? b.most inelastic?

The figure above shows the supply curve for roses. -In the figure above,at the point where the price is $60 per bunch,the price elasticity of supply is

If the supply of a good decreases and it causes total revenue to increase,this shows that the good has an

Suppose a good can be produced using commonly available resources.The elasticity of supply is

You are more sensitive to a change in price if you

If the income elasticity of demand for a Miami Dolphin season ticket is 2.34,then are Dolphin season tickets a normal or an inferior good?

Suppose the current price of barley is $7 per bushel and at that price 100,000 bushels are grown by a Colorado farmer.If the price of barley rises to $8 and quantity supplied increases to 130,000 bushels,then using the midpoint method,the price elasticity of supply for barley equals

Which of the following is most likely to have an income elasticity of demand that is less than 1?

-In the figure above,if the price falls from $8 to $7,demand is

KFC raises the price of its grilled chicken.The price elasticity of demand for KFC grilled chicken is 0.8.What happens to the KFC's total revenue?

An inferior good has a ________ elasticity of demand.

Total revenue equals

The figure above shows the demand curve for Starbucks latte. -Using the figure above,suppose Starbucks charges $4.50 per cup for its latte.Which of the following is true? i.At this price,the demand for Starbucks latte is elastic. ii.If Starbucks lowers the price of its latte,its revenue will decrease. iii.If Starbucks raises the price of its latte,the demand for it will become less elastic.

Suppose the quantity supplied of computers increases from 2 million to 4 million units as the price of a computer increases from $600 to $700.What does the price elasticity of supply equal?

For which of the following would the supply likely be most inelastic?