Exam 7: Consumer Choice and Elasticity

Suppose the state of New York imposes a one dollar per pack tax on cigarettes, which increases their price by 30 percent, and as a result, the quantity sold declines by 20 percent. The price elasticity of demand for cigarettes is equal to

As people have more time to adjust to a price change,

The market demand for a good is

If the quantity of oranges purchased decreases by 30 percent as the result of a 15 percent increase in the price of oranges, the price elasticity of demand for oranges is

A perfectly inelastic demand curve indicates that

If the price of apples rises from $.50 to $1.50 and quantity demanded falls from 1,000 to 900, we can conclude that the price elasticity for apples is

A local restaurant offers an "all you can eat" ribs special. If a person pays $11.95, she can eat as many servings as she desires at no additional cost. Can you infer anything about her marginal utility from observing her eating behavior?

Sarah recently got a 10 percent raise. She now purchases 30 percent more in groceries on a weekly basis. Sarah's income elasticity for groceries is

The price elasticity of demand for automobiles measures the responsiveness of

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

Figure 7-10 -Figure 7-10 depicts a demand curve with a price elasticity that is

Figure 7-12 -Refer to Figure 7-12. An increase in price from $20 to $30 would

John is a well-known consultant who makes $150 an hour and has all the work he can handle. He has a big job in Washington D.C., ten hours away. He can drive at a cost of $80 round trip or take a one-hour flight for $300. Which is he likely to do? Are there circumstances that may lead him to choose otherwise?

Figure 7-8 -For a price increase from $10 to $11, the price elasticity of the demand curve depicted in Figure 7-8 is

Which of the following would be the best example of consumer surplus?

Which of the following statements is true?

If the quantity demanded increases by 20 percent in response to a 10 percent decrease in price, demand is classified as

Jane received a 10 percent increase in her salary and purchased 20 percent more jewelry. For Jane, jewelry

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

Mark complains: "I can't believe they raised the price of comic books, and because of this, I'm going to reduce my demand for comic books." Is Mark stating the concept of demand correctly?