Exam 20: Consumer Choice and Elasticity

Tele-Com,Inc. ,a large cable TV company,tested the effect of a price reduction for the Disney Channel.It lowered prices from $10.75 to $7.95 and found that the number of customers more than doubled.This means the

Which of the following is not a fundamental that underlies consumer behavior?

If John's marginal benefit derived from the consumption of another candy bar is greater than the price of the candy bar,

When economists say the demand for a good is highly inelastic,they mean that

A recent increase in the supply of oranges caused the price to drop from $5 to $3 per bushel,and quantity demanded to rise from 10,000 bushels to 25,000 bushels.This indicates that the price elasticity of demand for oranges in this price range is

Suppose that the quantity of DVD players sold increased from 200 to 400 when the price fell from $225 to $175.Over this price range,the absolute value of the price elasticity of demand for DVD players is

When economists say the price elasticity of supply is elastic,they mean that

If the board of regents of a major state university system plans to raise tuition in order to increase revenues,the regents must believe student demand is

Fred,a poor college student,states: "I eat tuna sandwiches five times a week.When I graduate and get a real job,I will never purchase tuna again." Is Fred planning on breaking the law of demand?

The difference between normal and inferior goods is that

If taking an airplane from Pittsburgh to Miami cost $600 and takes 5 hours,while taking a bus would cost $150 and takes 50 hours,the minimum value of your time that would make it worthwhile to fly would be

If the price of hamburger increases,the substitution effect works to

The price elasticity of supply

A 15 percent increase in the price of beef reduces the quantity of beef consumed by 30 percent.Thus,the demand for beef is ____,and total consumer expenditure (or total firm revenue)will ____ as a result of the price increase.(Fill in the blanks. )

The demand for Chocolate Chip Cookie Dough ice cream is likely quite elastic because

Suppose you are the manager of a local water company,and you are instructed to get consumers to reduce their water consumption by 10 percent.If the price elasticity of demand for water is -.25,by how much would you have to raise the price of water?

Table 7-1 -Refer to Table 7-1.Whose demand does not conform to the law of demand?

If a Krispy Kreme doughnut shop near campus increases its prices by 5 percent,but revenues from its sales are unchanged,the price elasticity of demand for the services offered by the doughnut shop must be

Figure 7-16 -Which of the demand curves in Figure 7-16 is unit elastic?

If demand is inelastic,an increase in the price of a good will cause total expenditures on the good to