Exam 6: Elasticity: the Responsiveness of Demand and Supply

Which of the following statements is true?

Figure 6-10 -Refer to Figure 6-10.The supply curve on which price elasticity changes at every point is shown in

Suppose that at a price of $55, 100 units were sold while at a price of $33, 153 units were sold.Without calculating the price elasticity value, can you determine whether demand is elastic, unit elastic, or inelastic? Explain your answer.

If the percentage increase in price is 15 percent and the value of the price elasticity of demand is -3, then quantity demanded

Table 6-8 The town of Bloomfield is well known for its basketball team. The price of basketball game tickets is determined by market forces. Table 6-8 above shows the demand and supply schedules for basketball games tickets. -Refer to Table 6-8.What is the most distinctive feature of the supply curve?

According to the Apply the Concept feature in the textbook, in the alcohol industry, both wine and spirits are considered to be substitutes for beer.

Of the following, which is the best example of good with a perfectly inelastic demand?

Price elasticity of demand measures

For each pair of items below determine which product would have the higher price elasticity of demand (in absolute value). a.Insulin for a diabetic or aspirin for someone suffering a headache. b.A new Whirlpool 27 cu.ft.side-by-side refrigerator or electricity to power your all-electric home. c.A can of Red Bull or soft drinks in general.

Suppose the price elasticity of demand for methamphetamine is -0.35.If decriminalization caused the price of methamphetamine to fall by 75 percent, what will be the percentage increase in the quantity of methamphetamine demanded? If the price elasticity is -3.5, what will be the percentage increase in quantity demanded?

Suppose the California Nurses Union successfully secured a 12 percent increase in the wages of registered nurses.If a hospital responds by reducing the quantity of registered nurses hired and increasing the quantity of physician's assistants hired, what conclusion can you draw?

Necessities tend to have more inelastic demand than luxuries.

The cross-price elasticity of demand between Coca-Cola and Pepsi-Cola is calculated by dividing

Suppose you have surveyed a few industries and obtained information about the income elasticity of demand for their products.If you expect that the economy is headed for a long recession, you would advise people to look for jobs in an industry with

If a 35 percent increase in price of golf balls led to an 42 percent decrease in quantity demanded, then the demand for golf balls is

Define the economic concept of elasticity.

Suppose at a price of $50, Yoshi's Jazz Bar sells 20 tickets to its nightly jazz performance and at a price of $40, it sells 25 tickets.Based on this information, the demand for Yoshi's jazz performance is elastic.

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 the price elasticity of demand is unit elastic, a 10 percent increase in price will result in a 10 percent increase in revenue.

Explain why a local bottler of PepsiCo products would likely prefer a national soda tax to a local soda tax in its region.