Exam 5: Elasticities of Demand and Supply

Suppose the San Francisco 49ers lower ticket prices by 15 percent and as a result the quantity of tickets demanded increases by 10 percent.This set of results shows that San Francisco 49ers tickets have

-Using the figure above, suppose Starbucks charges $4.50 per cup for its latte.Which of the following is true? I∙At this price, the demand for Starbucks latte is elastic. Ii∙If Starbucks lowers the price of its latte, its revenue will decrease. Iii∙If Starbucks raises the price of its latte, the demand for it will become less elastic.

Perfectly inelastic demand means that consumers

Explain why the number of substitutes influences the price elasticity of demand.

Which of the following statements is correct for the price elasticity of demand along a linear, downward-sloping demand curve?

When income increases by 6 percent, the demand for potatoes decreases by 2 percent.The income elasticity of demand for potatoes equals

The price of beef increased by 20 percent and the quantity supplied increased by 10 percent.The supply of beef is

The cross elasticity of demand for blank DVDs and DVD burners is likely to be

If a firm supplies 200 units at a price of $50 and 100 units at a price of $40, using the midpoint method, what is the price elasticity of supply?

Along a linear (straight-line)downward-sloping demand curve, demand is unit elastic at

When the price of a textbook is $95, the quantity of textbooks supplied is 90 million a year and when the price rises to $105, the quantity of textbooks supplied is 110 million a year.The supply of textbooks is

A Minnesota snowmobile dealer lowers its prices in February by 16 percent and the quantity demanded increases by 2 percent.Thus the demand for snowmobiles from this dealer is ________ and the dealer's total revenue will ________.

If the cross elasticity of demand between peanut butter and milk is -1.11, then are peanut butter and milk substitutes or complements?

An inferior good has a ________ elasticity of demand.

The price elasticity of demand is a measure of

How does elasticity of supply differ for a product that can be stored, compared to a product that cannot be stored?

If we are trying to determine if two different products are substitutes, complements, or not related at all, we should find the value of the

Tacos and pizza are substitutes.If a 2 percent change in the price of a taco leads to a 4 percent change in the demand for pizza, the cross elasticity of demand equals

Suppose the price of a DVD rose from $15 to $17 and the quantity demanded decreased from 1,000 per month to 900 per month.Using the midpoint formula, the ________ percent change in price lead to a ________ percent change in the quantity demanded.

-In the figure above, the demand is inelastic in the range of prices between