Exam 6: Elasticity and Demand

refer to the following figure: -What is demand elasticity over the price range $40 to $60?

Fill in the blanks. -When demand is unitary elastic, an increase in price causes quantity demanded to _________________ and total revenue to ___________________.

Using the following demand schedule, calculate total revenue, marginal revenue, and price elasticity of demand. Then show the relation among marginal revenue, price, and elasticity of demand.

The price elasticity of demand for a firm's product is -2.25 over the range of prices being considered by the firm's manager. -If the manager wishes to increase sales by 25 percent, the manager predicts the price of the product must be _____________ by _______ percent.

Boeing estimates the elasticity of demand for new commercial jets is -1.25. Explain why the following statements are either true or false (i.e., state whether true or false and explain why.) -"The price effect dominates the quantity effect."

If the price elasticity of DVD recorders is -0.3 and price increases 20%, what happens to the quantity of DVD recorders demanded?

Use the graph below to answer the following questions: -At point B, if price decreases by a small amount, total revenue _____________ (rises, falls, remains constant), and marginal revenue is _______________ (positive, negative, zero).

Use the figure below to answer the following questions: -The elasticity of demand over the price interval $5 to $3 is __________.

In the graph shown below, the demand for good X shifts due to a change in the price of a related good Y. Holding the price of good X constant at $200, answer the following questions: -Goods X and Y are ________________.

Fill in the blanks. -When demand is elastic, a decrease in price causes quantity demanded to ___________ and total revenue to ________.

In the graph shown below, the demand for good X shifts due to a change in income. Holding the price of good X constant at $200, answer the following questions: -Good X is a ____________good.

Use the graph below to answer the following questions: -At point A, if price increases by a small amount, total revenue _____________ (rises, falls, remains constant), and marginal revenue is __________________ (positive, negative, zero).

Use the linear demand curve shown below to answer the following questions. The point elasticity of demand at a price of $650 is _________. -As price falls, |E| __________________ (gets larger, gets smaller, stays the same) for a linear demand curve.

Fill in the blanks. -If price rises and total revenue rises, demand must be _____________________.

Use the figure below to answer the following questions: -The elasticity of demand over the price interval $11 to $10 is __________.

Fill in the blanks. -If price falls and total revenue rises, demand must be _____________________.

Fill in the blanks. -When demand is elastic, the __________ effect dominates the __________ effect.

Use the figure below to calculate the cross-price elasticity of demand for good X when the price of good Y increases from $12 to $14:

Use the graph below to answer the following questions: -The elasticity of demand at a price of $4 is _________.

In the graph shown below, the demand for good X shifts due to a change in income. Holding the price of good X constant at $200, answer the following questions: -The graph shows how the demand for X shifts when income decreases from $45,000 to $42,000. Using the information in the graph, the income elasticity of demand for X is calculated to be _________.