Exam 5: Elasticity

(Figure) The figure shows two supply curves for two different periods for the same product. Based on the information in the graph, which statement is TRUE?

If demand is inelastic, the tax incidence falls more heavily on the _____, and deadweight loss is relatively_____.

Which of these would result in a lower price elasticity of demand?

(Figure: Determining Elasticity of Supply) The graph has four supply curves. Which curve represents the supply curve in the market period?

(Figure: Effects of Excise Tax) Based on the graph, after the excise tax is placed on the product, consumer surplus is

Which of these indicates a possible income elasticity measure for a normal good?

If the price of a product falls by 15% and the quantity supplied falls by 25%, we can assume that the elasticity of supply is inelastic.

An inferior good is a good that

If oranges cost $4 a bag last year, but they cost $5 a bag this year, the percent change in the price of oranges, using the base method, is

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

Which of these would result in a higher price elasticity of demand?

Products on which consumers spend a large share of their income are more likely to have elastic demand curves.

As the owner of a kayak tour business was looking over her financial records, she noticed that when the shop down the street increased the price of stand-up paddleboard tours by 10%, kayak tour sales increased by 15%. How might her sales be impacted if the paddleboard tour price is lowered by 20%?

Goods that are normally consumed together, such as coffee and tea, are called

If a product's price rises by 6% and its quantity demanded falls by 8%, then we can say that demand for this product is

In the short run, producers have the ability to change plant capacity.

Using the midpoint method, the price elasticity of demand between points a and b on the graph is

Demand for which of the following would be MOST inelastic?

The elasticity value of a perfectly elastic demand curve is 0.

Subira earns $125,000 a year and pays $20,000 in a certain tax. Qamar earns $75,000 a year and pays $15,000 in the same tax. We can conclude that this is a _____ tax.