Exam 5: Elasticity

If the price elasticity of demand is 0.1, then for every 10% increase in price, there is a _____ in quantity demanded.

A horizontal demand curve has a price elasticity of demand equal to

If the supply of a good is price elastic, the tax incidence falls more heavily on producers than on consumers.

If the price elasticity of demand is greater than 1, then economists say that

If the demand for bread is inelastic, which scenario might occur?

Which statement is TRUE?

State sales taxes are considered by many economists to be _____ because _____.

If soda and potato chips are complements, then their cross elasticity of demand is

(Figure: Interpreting Short-Run Supply Curves) Based on the graph, which of the curves would MOST likely depict a supply curve in the short run?

(Figure: Impact of Tax on Market Equilibrium) Based on the graph, the deadweight loss created by the tax equals _____, and it is borne primarily by the _____.

Two goods are close substitutes for each other if their cross elasticity of demand equals 0.

If the demand for Quilted Northern bath tissue is elastic, then the

Tax incidence usually falls

The demand for a vacation in Europe is MOST likely

(Figure: Interpreting Short-Run Supply Curves) Based on the graph, which of the curves would MOST likely depict a supply curve in the long run?

Suppose that the price elasticity of supply for motorized scooters is 0.5. If the quantity supplied of motorized scooters increases by 30%, what was the increase in price?

Using the midpoints of price and quantity to compute percentage changes between points a and b

In general, the burden of taxes falls more on the buyer if demand for the product taxed is

Which good is the MOST income inelastic?

If demand is extremely elastic, it is likely that _____ will bear most of the burden of a tax and that the deadweight loss will be relatively _____.