Exam 6: Elasticity: the Responsiveness of Demand and Supply

Figure 6.4 -Refer to Figure 6.4.At the midpoint of the demand curve, in absolute value,

Table 6.1 The publisher of a magazine gives his staff the following information: Current price \ 2,00 per issue Current sales 150,000 copies per month Current revenue \ 300,000 per month Current total costs \ 450,000 per month He tells the staff, "Our costs are currently $150,000 more than our revenues each month. I propose to eliminate this problem by raising the price of the magazine to $3.00 per issue. This will result in our revenue being exactly equal to our cost." -Refer to Table 6.1.Which of the following statements is correct?

Studies show that the income elasticity of demand for wine is approximately five.What does this mean?

The price elasticity of supply is equal to

For people who live near a bus route, a subway station, or a commuter rail line, public transportation provides a substitute to driving their own cars.So, for these people, the cross-price elasticity of demand between gasoline and public transportation is

If a firm is in an antitrust court case being accused of monopolizing a product, the firm would hire an economist to show

If a firm wanted to know whether the demand for its product was elastic, unit-elastic, or inelastic, then the firm could

Figure 6.7 -Refer to Figure 6.7.What is the value of the price elasticity of supply between g and h?

The price elasticity of supply for umbrellas is 2.Suppose you're told that following a price increase, quantity supplied increased by 30 percent.What was the percentage change in price that brought this about?

When Audrina raised the price of her home made cookies, her total revenue increased.This suggests that the demand for Audrina's cookies is elastic.

Which of the following goods would have the most inelastic demand?

The demand for gasoline is perfectly inelastic because most people need gasoline to drive their cars.

Which of the following is one reason why the income of small family farms has decreased over time?

The cross-price elasticity of demand between an unlimited texting option and an unlimited call minutes option offered from a cell phone provider would be

A service station owner in Prince George, British Columbia, was worried that raising the price of gasoline would cause the quantity demanded to fall by so much that he would be in a worse situation than if he did not raise the price.If raising the price of gasoline would cause the owner to receive less total revenue from the sale of gasoline, the demand for gasoline is

When demand is elastic, a fall in price causes total revenue to rise because

Between 1931 and 2014 the number of acres devoted to wheat production in Canada ________ and the price of wheat ________.

Table 6.1 Price per Pound (dollars) Quantity of Cheese Demanded (pounds) \ 16 3 14 4 12 5 10 6 8 7 6 8 4 9 2 10 -Refer to Table 6.1.Over what range of prices is the demand inelastic?

Explain the economic concept of price elasticity of supply.How is price elasticity of supply calculated?

If the cross-price elasticity of demand between Breeze Detergent and Faber Detergent is a relatively large positive number, then it indicates that