Exam 6: Elasticity: the Responsiveness of Demand and Supply

At a price of $20, Daphne sells 35 hand-painted dog collars per week.When she raised her price to $25, she sold 28 per week.Based on this information, the demand for her dog collars is

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

The price of wheat has fallen since 1950.Which of the following explains this price decline?

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

If 50 units are sold at a price of $20 and 80 units are sold at a price of $15, what is the absolute value of the price elasticity of demand? Use the midpoint formula.

Income elasticity measures how a good's quantity demanded responds to

Figure 6-4 -Refer to Figure 6-4.Which of the following statements about price elasticity of demand is true?

A study of the effects of the minimum wage on employment of low-skilled workers estimated the price elasticity of demand for low-skilled workers is -0.75.Suppose that the government is considering raising the minimum wage from $7.25 per hour to $7.75 per hour.Based on this information, calculate the percentage change in the employment of low skilled workers.Use the midpoint formula.

If the quantity of walkie-talkies supplied increases by 5 percent when price increases by 12 percent, then

When there are few substitutes available for a good, demand tends to be relatively inelastic.

The demand for gasoline in the short run is

Table 6-4 The publisher of a magazine gives his staff the following information: 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 6-4.Which of the following statements is correct?

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

Linesha, a college student working part-time received a wage increase.An avid movie buff, she increased her purchases of Blu-ray discs and reduced her purchases of DVDs.Based on this information

The price elasticity of supply measures

Suppose a 4 percent increase in income results in a 2 percent decrease in the quantity demanded of a good.Calculate the income elasticity of demand for the good and determine what type of good it is.

Article Summary Tickets for the Los Angeles production of the musical 'Hamilton' sold out quickly after going on sale in April. These tickets, sold through the box office at the Pantages Theater and through authorized seller Ticketmaster, were priced as low as $85 for mezzanine seats and $125 for orchestra seats. Once the tickets sold out, the only available seats for the musical which ran from August 11 through December 30, were through ticket resellers such as StubHub and SeatGeek, with tickets selling at an average price of $467 to $510. Ticket prices were the most expensive for August dates, with an average price of $624, and fell for dates in the following months, with December prices averaging $335. Source: Nicholas Cheng, "Don't have a ticket to 'Hamilton' yet? It's going to cost you," Los Angeles Times, August 19, 2017. -Refer to the Article Summary.How would the Pantages Theater know if it was operating on the elastic portion of the demand curve for 'Hamilton' tickets?

Assume that a 2 cent per ounce percent soda tax led to a large increase in its price and only a small decrease in the quantity of soda demanded.Economic analysis would lead one to conclude that

The absolute value of the price elasticity of demand for telescopes is 1.5.Therefore, telescopes can be classified as a luxury.

Consider the following types of demand curves: A.a vertical demand curve B.a horizontal demand curve C.a linear downward-sloping demand curve Which of the demand curves listed exhibits a price elasticity of demand coefficient that remains constant along the demand curve?