Exam 5: Elasticity

Proposals to increase an excise tax usually focus on

Which factor would increase elasticity of demand the MOST?

If the price of JoBob's Beef Jerky increases and total revenue earned by JoBob, Inc. increases by $1 million, then we can definitively conclude that

Loss leaders primarily rely on which of these to maximize revenue?

A restaurant's offer of free children's meals in an effort to attract the parents' business is an example of

If a 1% increase in the price of gummy bears causes gummy bear sales to decline by 0.4%, then the price elasticity of demand is

(Figure: Determining Consumer and Producer Surplus) Based on the graph, producer surplus is shown by area

If demand is unitary elastic, then the

If research finds demand elasticities of 0.05 and 0.6 for the same good or service, then

A tax on a product

A supply curve in the long run is likely to be _____ than the supply curve in the short run because the price elasticity of supply in the long run is more _____.

Suppose the market for premium music streaming exhibits the typical downward-sloping demand curve and upward-sloping supply curve. A new excise tax placed on music streaming services would lead to _____ consumer surplus, _____ producer surplus, and _____ deadweight loss.

The sign of the elasticity of supply is always positive.

The average price of pineapples fell from $5 to $4, and the quantity supplied decreased from 1 million to 900,000 units. Using the base method, the price elasticity of supply is

Inelastic supply has a numerical value

If the quantity demanded of a product falls by 9% as people's incomes rise by 3%, the product must be a normal good.

Tracey sells 100 gourmet cupcakes per day at $2 each. She is considering raising her price to $2.50 per cupcake in order to increase her total revenue. If the price elasticity of demand for Tracey's cupcakes is 2, would she increase her total revenue?

If income increases by 12% and the quantity demanded of a good increases by 14%, the good is a(n) _____ good.

When a product's price increases, what happens to the producer's total revenue when demand is price elastic, price inelastic, and unitary elastic?

From the producer's perspective, what are the positive and negative consequences of products with price inelastic demand?