Exam 5: Elasticity and Its Applications

For which of the following goods would demand be most elastic?

Drug interdiction,which reduces the supply of drugs,may decrease drug-related crime because the demand for drugs is inelastic.

In which of these instances is demand said to be perfectly inelastic?

Figure 5-11 -Refer to Figure 5-11.Which supply curve represents perfectly inelastic supply?

Table 5-2 -Refer to Table 5-2.Along which of the supply curves does quantity supplied move proportionately more than the price?

When the price of a good is $5,the quantity demanded is 100 units per month;when the price is $7,the quantity demanded is 80 units per month.Using the midpoint method,the price elasticity of demand is about

Price elasticity of supply measures how much the quantity supplied responds to changes in the price.

If a 6 percent increase in income results in a 10 percent increase in the quantity demanded of pizza,then the income elasticity of demand for pizza is

For a particular good,a 2 percent increase in price causes a 12 percent decrease in quantity demanded.Which of the following statements is most likely applicable to this good?

In any market,total revenue is calculated by taking the price of the good and

If the price elasticity of demand is equal to 0,then demand is unit elastic.

When the price of bubble gum is $0.50,the quantity demanded is 400 packs per day.When the price falls to $0.40,the quantity demanded increases to 600.Given this information and using the midpoint method,we know that the demand for bubble gum is

Figure 5-5 -Refer to Figure 5-5.When the price is $30,total revenue is

Figure 5-1 -Refer to Figure 5-1.Suppose the point labeled B is the "halfway point" on the demand curve and it corresponds to a price of $5.00.Then,between prices of $4.90 and $5.10,

Given the market for illegal drugs,when the government is successful in reducing the flow of drugs into the United States,

For a horizontal demand curve,

Economists compute the price elasticity of demand as the

When studying how some event or policy affects a market,elasticity provides information on the

Figure 5-9 -Refer to Figure 5-9.Between point A and point B on the graph,demand is

Figure 5-3 -Refer to Figure 5-3.If price falls within the C range of the demand curve we can expect total revenue to