Exam 5: Elasticities of Demand and Supply

Suppose the price elasticity of demand for bouquets of flowers is 4.0.You are charging $8 per bouquet.If you want to increase the quantity of bouquets you sell by 20 percent,what price should you charge?

Jess owns a sandwich shop.The price of a sandwich recently increased from $5 to $7.Jess responded by increasing the quantity of sandwiches she supplied from 70 to 90 per day.Using the midpoint method,Jess's price elasticity of supply is equal to

What is the price elasticity of demand? In terms of percentage changes,what is its formula?

When hamburger is $3 per pound,Ms.Rush buys 6 pounds.When hamburger is $2 per pound,Ms.Rush buys 10 pounds.Describe Ms.Rush's demand between these two prices.

A firm raises the price it charges.The firm's total revenue decreases.What can we conclude about the price elasticity of demand?

Suppose the local university charges $85 per credit hour.If tuition increases from $85 to $93 per credit hour,using the midpoint method,what is the percentage change in price?

If the quantity supplied and the price change by the same percentage,then supply is

If a 5 percent increase in income brings about a 10 percent decrease in the demand for a good,then the

Suppose the demand for peaches sold from one roadside stand in Georgia is perfectly elastic.As a result,a 7 percent increase in the price charged by the owner of this stand leads to

Demand is elastic if

If a 10 percent increase in income leads to a 5 percent decrease in the demand for a good,the income elasticity of demand equals ________ and the good is ________ good.

-In the figure above,what happens to total revenue as we move from point A to point B?

When the price of going to a movie rises 5 percent,the quantity of DVDs demanded increases 10 percent.The cross elasticity of demand equals

The demand for a good is more elastic if the

The figure above shows the demand curve for Starbucks latte. -In the figure above,when the price rises from $3 to $4,the price elasticity of demand is

The income elasticity of demand is a measure of

Which of the following statements is correct?

How are the cross elasticity of demand and income elasticity of demand similar and how are they different from the price elasticity of demand?

The supply of beach front property on St.Simon's Island is

Price (dollars per admission) Quality demanded (thousands of visits per week) 10 100 8 200 6 300 4 400 2 200 -The table above gives the demand schedule for museum visits. a.You,as the resident economist,have been given the task of maximizing the museum's total revenue.What admission price should you charge? b.What is the elasticity of demand between $6 and $4? c.Moving along the demand schedule from $10 to $8 to $6 and ultimately to $4,how does the price elasticity of demand change in size?