Exam 6: Elasticity: the Responsiveness of Demand and Supply

Perfectly inelastic demand is represented by a demand curve which is ________, and relatively inelastic demand is represented by a demand curve which is ________.

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.

Which of the following statements about price elasticity of demand is false?

Explain the relationship between price elasticity of demand and total revenue.

Suppose the governor of California has proposed increasing toll rates on California's toll roads, and has presented two possible scenarios to implement these increases.Following are projected data for the two scenarios for the California toll roads: Scenario 1: Toll rate in 2015: $10.00.Toll rate in 2019: $22.50 For every 100 cars using the toll roads in 2015, only 81.6 cars will use the toll roads in 2019. Scenario 2: Toll rate in 2015: $10.00.Toll rate in 2019: $17.50 For every 100 cars using the toll roads in 2015, only 96.2 cars will use the toll roads in 2019.

Table 6-6 -Refer to the Article Summary above.Based on the difference between the face value of Super Bowl tickets and the prices being charged in the resale market, the demand at the face value of the tickets is

Figure 6-10 -Refer to Figure 6-10.A unit-elastic supply curve is shown in

Consider the following pairs of items: A.shampoo and conditioner B.iPhones and earbuds C.a laptop computer and a desktop computer D.beef and pork E.air-travel and weed killer Which of the pairs listed will have cross-price elasticity of zero?

In general, a "big ticket item" such as a house or new car will

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

There are a limited number of original Picasso paintings.This means that the supply of original Picasso paintings is perfectly elastic.

If the demand for cell phone service is inelastic, then

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.

Jonah lives in a small town where there is only one Mexican restaurant.Which of the following is likely to be true about the price elasticity of demand for meals at the Mexican restaurant?

The cross-price elasticity between Gillette razors and a related good is -3.4.What happens to the demand for the related good if the price of Gillette razors falls by 10 percent?

Price elasticity of supply is used to gauge

The larger the share of a good in a consumer's budget, holding everything else constant, the

If a 5 percent increase in income leads to a 10 percent increase in quantity demanded for airline travel, then airline travel is

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?

The paradox of American farming is