Exam 5: Elasticities of Demand and Supply

-Steve sells hotdogs from a vending cart downtown.The table above shows his daily total revenues at four different prices.Between which two prices is the demand for hotdogs a∙elastic? b∙unit elastic? c∙inelastic?

The income elasticity of demand for movies in the United States is 3.41.If people's incomes decrease by 1 percent, what is the decrease in the quantity of movies demanded?

If Pepsi goes on sale and decreases its price by 10 percent, and as a result, the quantity demanded of Coca Cola decreases by 5 percent, then Pepsi and Coke are ________ goods.

Suppose Starbucks currently charges $2.50 per cup for its latte.If Starbucks raises the price to $3.00 per cup, based on the demand curve in the figure above its total revenue will ________ because the demand for Starbucks latte is ________ over this price range.

The price of the good multiplied by the quantity sold is its

Patrick lives near two gas stations, Exxon and Shell.If Exxon decreases the price of gas, we predict that the quantity of gasoline demanded at Shell will

The income elasticity of demand is ________ if the good is ________ good.

Suppose the University of Oklahoma increases the price of student football tickets for the 2012 season by 30 percent.If the price elasticity of demand for student tickets is 1.22, the price increase leads to

The price elasticity of demand measures the ________ that results from a ________.

-In the figure above, at the point where the price is $60 per bunch, the price elasticity of supply is

If a product is an inferior good, then its income elasticity of demand is

If a small percentage change in the price brings a very large percentage change in the quantity supplied, then the supply is almost perfectly ________ and the supply curve is almost ________.

Suppose bad weather decreases the quantity of wheat by 12 percent.If the price elasticity of demand for wheat is 0.6, how would the crop failure affect the price of wheat? Would the crop decrease benefit or harm wheat farmers?

If a decrease in price increases total revenue, what can you determine about the elasticity of demand for the good?

If the cross elasticity of demand between car insurance and new cars is -0.41, then car insurance and new cars are

After long hair for men became popular, barbers found that their incomes fell.In an attempt to boost their incomes, many barbers raised the price of a haircut and yet their total revenue fell even more.What can explain this result?

The price elasticity of supply is a measure of the extent to which the quantity supplied of a good changes when the

Which of the following statements is correct? The

For a good such as a large screen HD television set, the income elasticity would likely be

People eat at restaurants less often when their incomes fall because of a recession.Eating at restaurants must be