Exam 5: Elasticity and Its Applications

Using the midpoint method,the price elasticity of demand for a good is computed to be approximately 0.78.Which of the following events is consistent with a 4.68 percent decrease in the quantity of the good demanded?

Figure 5-7 -Refer to Figure 5-7.Total revenue when the price is P₂ is represented by the area(s)

Supply tends to be more elastic in the short run and more inelastic in the long run.

If the price elasticity of demand for a good is 4.0,then a 10 percent increase in price results in a

Necessities tend to have inelastic demands,whereas luxuries have elastic demands.

In the long run,the quantity supplied of most goods

The price elasticity of demand for bread

Figure 5-8. A demand curve is shown on the graph below. On the graph, Q represents quantity demanded and P represents price. -Refer to Figure 5-8.At a price of $48 per unit,sellers' total revenue amounts to

The supply of a good will be more elastic,the

A key determinant of the price elasticity of supply is

Price elasticity of demand along a linear,downward-sloping demand curve increases as price falls.

Demand is said to be elastic if

Which of the following would be true as the price elasticity of supply approaches infinity?

A perfectly elastic demand implies that

Demand is said to have unit elasticity if elasticity is

Figure 5-5 -Refer to Figure 5-5.An increase in price from $30 to $35 would

According to a Los Angeles Times article published in May 2005,recent estimates indicate that

Figure 5-12 -Refer to Figure 5-12.Along which of these segments of the supply curve is supply most elastic?

For a good that is a luxury,demand

If the quantity demanded of a certain good responds only slightly to a change in the price of the good,then