Exam 5: Elasticity and Its Applications

Last year,Sheila bought 6 pairs of shoes when her income was $40,000.This year,her income is $50,000 and she purchased 10 pairs of shoes.Holding other factors constant,it follows that Sheila

The flatter the demand curve through a given point,the

Get Smart University is contemplating an increase in tuition to enhance revenue.If GSU feels that raising tuition would enhance revenue,they are

Figure 5-11 -Refer to Figure 5-11.Which supply curve is most likely relevant over a very long period of time?

When demand is unit elastic,price elasticity of demand

Figure 5-1 -Refer to Figure 5-1.Assume the section of the demand curve labeled C corresponds to prices between $0 and $15.Then,when the price changes between $7 and $9,

If corn farmers know that the demand for corn is inelastic,and they want to increase their total revenue,they should all

A bakery would be willing to supply 500 bagels per day at a price of $0.50 each.At a price of $0.80,the bakery would be willing to supply 1,100 bagels.Using the midpoint method,the elasticity of supply for bagels is about

Use the graph shown to answer the following questions.Put the correct letter in the blank. a.The elastic section of the graph is represented by section _______. b.The inelastic section of the graph is represented by section _______. c.The unit elastic section of the graph is represented by section _______. d.The portion of the graph in which a decrease in price would cause total revenue to fall would be _________. e.The portion of the graph in which a decrease in price would cause total revenue to rise would be _________. f.The portion of the graph in which a decrease in price would not cause a change in total revenue would be _________. g.The section of the graph in which total revenue would be at a maximum would be _______. h.The section of the graph in which elasticity is greater than 1 is _______. i.The section of the graph in which elasticity is equal to 1 is ______. j.The section of the graph in which elasticity is less than 1 is _______.

If two goods are substitutes,their cross-price elasticity will be

When demand is inelastic,a decrease in price will cause

If an increase in the price of a good results in an increase in total revenue for the firm,then the supply of the good must be

How does the concept of elasticity allow us to improve upon our understanding of supply and demand?

When the price of kittens was $25 each,the pet shop sold 20 per month.When they raised the price to $35 each,they sold 14 per month.The price elasticity of demand for kittens is about

If the price elasticity of demand for a good is 1.65,then a 3 percent decrease in price results in a

Barb's Bakery earned $200 in total revenue last month when it sold 100 loaves of bread.This month it earned $300 in total revenue when it sold 60 loaves of bread.The price elasticity of demand for Barb's bread is

Consider the following pairs of goods.For which of the two goods would you expect the demand to be more price elastic? Why? a.water or diamonds b.insulin or nasal decongestant spray c.food in general or breakfast cereal d.gasoline over the course of a week or gasoline over the course of a year e.personal computers or IBM personal computers

The cross-price elasticity of demand can tell us whether goods are

When supply is perfectly elastic,the value of the price elasticity of supply is

There are fewer farmers in the United States today than 200 years ago because of