Exam 4: Elasticity

Refer to the accompanying figure. When the price is equal to 8, the price elasticity of demand for the demand curve D1 is ________ and for D2 the price elasticity of demand is ________.

If the price elasticity of demand for chicken is 2, then a 20 percent decrease in the price of chicken will lead to a:

Satellite TV is a close substitute for cable TV. In the 1990's, small satellite TV units were developed that made it less costly for individual consumers to subscribe to satellite TV service. This caused the price elasticity of demand for cable TV service to:

The accompanying graph depicts demand. At point A, demand is:

The percentage change in quantity supplied that results from a 1 percent change in price is known as the:

Refer to the accompanying figure. The absolute value of the slope of the demand curve D1 is ________, and the absolute value of the slope of demand curve D2 is ________.

In surveying their alumni, State U's economics department discovered that ramen noodle consumption declined once students graduated and found jobs. One conclusion the survey team might draw from this result is that:

The price elasticity of demand is a measure of:

A firm that produces a good with many substitutes will most likely find that:

Suppose that Chris had been charging $1.00 per pound for potatoes. When Chris lowered the price to $0.90 per pound, his total revenue fell. When Chris raised the price to $1.10, total revenue also fell. Which of the following could explain this?

If the absolute value of the price elasticity of demand for tickets to a football game is 2, then if the price increases by 1 percent, quantity demanded decreases by:

The cross-price elasticity of demand between bread and potatoes is estimated to be 0.5. This implies bread and potatoes are:

If the elasticity of demand for the latest American Idol album is 1.4, this means

Suppose that a new drug has been approved to treat a life-threatening disease. The demand for that drug is shown on the accompanying graph. Prior to approval of this drug, the only treatment for this condition was any one of several non-prescription, or over-the-counter, pain relievers. The demand for one brand of the several non-prescription pain relievers is also shown on the graph. Demand for the new drug is ________ while demand for one brand of the over-the-counter pain relievers is ________.

Refer to the accompanying figure. At a price of $2, the total expenditure on lattes each hour equals:

You read online that, at current rates of production, the yearly world supply of food is sufficient to feed the projected 2050 population of earth, but that after 2050 there will be massive starvation. This prediction appears to assume that:

If the demand curve is horizontal, then demand is:

Suppose that total expenditures for coffee reach a maximum at a price of $5 per pound. At this price, the demand for coffee is:

Refer to the accompanying figure. When P = 4, the price elasticity of demand for the demand curve D1 is ________ and D2 is ________.

If consumers completely cease purchasing a product when its price increases by any amount, then demand is: