Exam 5: Elasticity: a Measure of Responsiveness

Last semester there were 5,000 parking spaces available on campus.The price of a parking permit was $80 per semester,and the quantity demanded equaled the quantity supplied at this price.Suppose the number of parking spaces increases by 10% and the elasticity of demand for parking is 0.5.Parking Services should ________ the price of a permit by ________ to guarantee that quantity demanded will equal quantity supplied.

If the price elasticity of supply is 1.2,then a 15% decrease in price will result in how much of a percentage change in quantity supplied? Will quantity supplied increase or decrease?

-Refer to Figure 5.4.The demand for tickets is

Based on the determinants of elasticity as discussed in the text,explain what the price elasticity of demand of the following products would be: a)diamond rings; and b)salt.

Which is likely to be more elastic: the demand for orange juice or the demand for a particular brand of orange juice? Explain.

The price elasticity of demand is constant along a downward-sloping linear demand curve.

If the price elasticity of supply is equal to zero,then supply is perfectly inelastic.

What does it mean for a good to have a perfectly elastic demand? Draw a demand curve of this type.Explain why it has the shape that it does.

Compared to the short run,the elasticity of demand in the long run is likely to

-Refer to Figure 5.5.Using the midpoint method,if the price of a gardenburger is increased from $6 to $7,the price elasticity of demand equals

If the demand for pineapples is unit elastic,the value of the price elasticity of demand for pineapples is

List two determinants of price elasticity of demand.

What does the cross-price elasticity of demand measure? How is it calculated?

Studio clothing store knows that the price elasticity of demand for its jeans is 2.5.If the price of jeans were to increase by 10%,the quantity of jeans demanded would

If the supply curve is a vertical line,then supply is perfectly inelastic.

If the supply curve is a vertical line,then supply is perfectly elastic.

Good X and good Y are substitutes if the

Recall the Application about the price of vanity license plates in Virginia to answer the following question(s). -Recall the illustration regarding antidrug policies and property crimes.What is the connection between antidrug policies and property crimes such as robbery,burglary,and auto theft?

The price elasticity of demand for gasoline is 0.5 and the price elasticity of supply for gasoline is 1.1.If demand rises by 25%,the price of gasoline will

When the price of toothpaste increases by 15 percent,the quantity of toothpaste demanded falls by 30 percent.Calculate the price elasticity of demand.Is the demand for toothpaste elastic,inelastic,or unit elastic?