Exam 6: Elasticity: the Responsiveness of Demand and Supply

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.

The demand for gasoline in the short run is

The slope of a demand curve is not used to measure the price elasticity of demand because

A demand curve that is horizontal indicates that the commodity

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

An increase in the demand for green tea raises the price of green tea from $16 a pound to $20 a pound.As a result, quantity supplied increases by 30 percent.Using the midpoint formula, what is the value of the price elasticity of supply?

If the income elasticity for canned food is 0.8, then canned food is an inferior good.

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

Rank these three items in terms of the elasticity of the demand for them at any given price, from most elastic to least elastic: hot beverages, coffee and Peet's Coffee.

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?

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.

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

In order to prove that Motrin and Ibuprofen are substitutes, one should measure the ________ and get a ________.

If the demand for a life-saving drug was perfectly inelastic and the price doubled, the quantity demanded would

Jaycee Jeans sold 40 pairs of jeans at a price of $40.When it lowered its price to $20, the quantity sold increased to 60 pairs.Calculate the absolute value of the price elasticity of demand.Use the midpoint formula.

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

Cross-price elasticity of demand is calculated as the

For a given demand curve, will there be a greater loss of economic efficiency from a binding price floor when supply is elastic or inelastic? Illustrate your answer with a demand and supply graph.In your graph you must show two supply curves, one elastic and the other inelastic.

Carrie Bradshaw claims that when it comes to buying shoes, "price is no object." If this is true, then her demand for shoes is

If demand is inelastic, the absolute value of the price elasticity coefficient is greater than one.