Exam 5: Elasticity: Measuring Responsiveness

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(Figure: Demand Curves) The figure shows four different demand curves for four different products: A, B, C and D. Which of the products has a perfectly inelastic demand curve?

(Multiple Choice)

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Question 21

A grocery store raises the price of organic oranges from $1.50 per orange to $1.95 per orange. The quantity of oranges sold then changes from 4000 oranges per month to 3200 oranges per month. (a) Calculate the change in total revenue. (b) Based on the change in total revenue, can you tell whether the demand for organic oranges is elastic or inelastic?

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Question 22

Suppose the percent change in the quantity demanded for water for any price change is zero. The demand curve for water is _, and the price elasticity of demand is perfectly _.

(Multiple Choice)

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Question 23

If income rises by 10% and the quantity demanded of an item rises by 20%, the income elasticity of demand for this item is:

(Multiple Choice)

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Question 24

(Figure: Supply Curves) The figure shows four different supply curves for four products A, B, C and D. Which one of the supply curves probably belongs to a crop that takes a long time to grow?

(Multiple Choice)

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Question 25

The income elasticity of demand for fresh winter vegetables has been estimated to be 0.6. If income grows by 10% in a given period, demand will:

(Multiple Choice)

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Question 26

The price of milk at the local grocery store is cut by 15%. In response to the price cut, the quantity of milk demanded falls by 5%. The absolute value of the price elasticity of demand for milk is _, and the price elasticity of demand is _.

(Multiple Choice)

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Question 27

(Table: Martinez Family Household Income and Expenditures) Use Table: Martinez Family Household Income and Expenditures. The Martinez's income elasticity of demand for books is:

(Multiple Choice)

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Question 28

You are given some data for four different products - milk, eggs, beef, and orange juice. The absolute value of the price elasticity of demand for beef is 0.9. The absolute value of the price elasticity of demand for orange juice is 3.5. Which product has the most inelastic demand?

(Multiple Choice)

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Question 29

Demand for soda outside an airport is more elastic than inside of the airport because:

(Multiple Choice)

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Question 30

The income elasticity of demand for pears has been estimated as 2.46. If income grows by 12%, all other things equal, demand will:

(Multiple Choice)

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Question 31

(Figure: Demand Curve for Insulin) Use Figure: Demand Curve for Insulin. The figure shows a demand curve that is:

(Multiple Choice)

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Question 32

If the price elasticity of supply is:

(Multiple Choice)

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Question 33

(Figure: Supply Curve for Hotel Rooms) Use Figure: Supply Curve for Hotel Rooms. The figure depicts a supply curve that is:

(Multiple Choice)

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Question 34

When the price of profiteroles increases from $1.55 to $2.00, the quantity demanded of profiteroles decreases from 220 pastries to 180 pastries. If the price is $1.55, total revenue is _, and if the price is $2.00, total revenue is _.

(Multiple Choice)

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Question 35

The income elasticity of demand of a normal good is always:

(Multiple Choice)

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Question 36

When the price of profiteroles decreases from $1.10 to $0.95, the quantity demanded of profiteroles increases from 190 pastries to 215 pastries. If the price is $1.10, total revenue is _, and if the price is $0.95, total revenue is _.

(Multiple Choice)

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Question 37

The price of product A is cut by 50%. As a result, the quantity demanded of product B rises by 50%. The cross-price elasticity of demand between product A and product B is _, and they are _.

(Multiple Choice)

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Question 38

Delilah's income rises by 8%. She decides to increase the number of movie tickets she purchases by 20%. Her income elasticity of demand for movie tickets is:

(Multiple Choice)

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Question 39

If quantity demanded does not respond significantly to a relatively large change in price, demand is:

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Question 40

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Exam 5: Elasticity: Measuring Responsiveness

(Figure: Demand Curves) The figure shows four different demand curves for four different products: A, B, C and D. Which of the products has a perfectly inelastic demand curve?

Suppose the percent change in the quantity demanded for water for any price change is zero. The demand curve for water is _____, and the price elasticity of demand is perfectly _____.

If income rises by 10% and the quantity demanded of an item rises by 20%, the income elasticity of demand for this item is:

(Figure: Supply Curves) The figure shows four different supply curves for four products A, B, C and D. Which one of the supply curves probably belongs to a crop that takes a long time to grow?

The income elasticity of demand for fresh winter vegetables has been estimated to be 0.6. If income grows by 10% in a given period, demand will:

The price of milk at the local grocery store is cut by 15%. In response to the price cut, the quantity of milk demanded falls by 5%. The absolute value of the price elasticity of demand for milk is _____, and the price elasticity of demand is _____.

(Table: Martinez Family Household Income and Expenditures) Use Table: Martinez Family Household Income and Expenditures. The Martinez's income elasticity of demand for books is:

You are given some data for four different products - milk, eggs, beef, and orange juice. The absolute value of the price elasticity of demand for beef is 0.9. The absolute value of the price elasticity of demand for orange juice is 3.5. Which product has the most inelastic demand?

Demand for soda outside an airport is more elastic than inside of the airport because:

The income elasticity of demand for pears has been estimated as 2.46. If income grows by 12%, all other things equal, demand will:

(Figure: Demand Curve for Insulin) Use Figure: Demand Curve for Insulin. The figure shows a demand curve that is:

If the price elasticity of supply is:

(Figure: Supply Curve for Hotel Rooms) Use Figure: Supply Curve for Hotel Rooms. The figure depicts a supply curve that is:

When the price of profiteroles increases from $1.55 to $2.00, the quantity demanded of profiteroles decreases from 220 pastries to 180 pastries. If the price is $1.55, total revenue is _____, and if the price is $2.00, total revenue is _____.

The income elasticity of demand of a normal good is always:

When the price of profiteroles decreases from $1.10 to $0.95, the quantity demanded of profiteroles increases from 190 pastries to 215 pastries. If the price is $1.10, total revenue is _____, and if the price is $0.95, total revenue is _____.

The price of product A is cut by 50%. As a result, the quantity demanded of product B rises by 50%. The cross-price elasticity of demand between product A and product B is _____, and they are _____.

Delilah's income rises by 8%. She decides to increase the number of movie tickets she purchases by 20%. Her income elasticity of demand for movie tickets is:

If quantity demanded does not respond significantly to a relatively large change in price, demand is:

The Core Principles of Economics

Demand: Thinking Like a Buyer

Supply: Thinking Like a Seller

Equilibrium: Where Supply Meets Demand

When Governments Intervene in Markets

Welfare and Efficiency

Gains From Trade

International Trade

Externalities and Public Goods

Labor Demand and Supply

Wages, Workers, and Management

Inequality, Social Insurance, and Redistribution

Market Structure and Market Power

Entry, Exit, and Long-Run Profitability

Business Strategy

Sophisticated Pricing Strategies

Game Theory and Strategic Choices

Decisions Involving Uncertainty

Decisions With Private Information

Sizing up the Economy Using Gdp

Economic Growth

Unemployment

Inflation and Money

Consumption and Saving

Investment

The Financial Sector

International Finance and the Exchange Rate

Business Cycles

IS-MP Analysis: Interest Rates and Output

Phillips Curve

The Fed Model: Linking Interest Rates, Output, and Inflation

Aggregate Demand and Aggregate Supply

Monetary Policy

Government Spending, Taxes, and Fiscal Policy

Appendix: Aggregate Expenditure and the Multiplier

Filters

Suppose the percent change in the quantity demanded for water for any price change is zero. The demand curve for water is _, and the price elasticity of demand is perfectly _.

The price of milk at the local grocery store is cut by 15%. In response to the price cut, the quantity of milk demanded falls by 5%. The absolute value of the price elasticity of demand for milk is _, and the price elasticity of demand is _.

When the price of profiteroles increases from $1.55 to $2.00, the quantity demanded of profiteroles decreases from 220 pastries to 180 pastries. If the price is $1.55, total revenue is _, and if the price is $2.00, total revenue is _.

When the price of profiteroles decreases from $1.10 to $0.95, the quantity demanded of profiteroles increases from 190 pastries to 215 pastries. If the price is $1.10, total revenue is _, and if the price is $0.95, total revenue is _.

The price of product A is cut by 50%. As a result, the quantity demanded of product B rises by 50%. The cross-price elasticity of demand between product A and product B is _, and they are _.