Exam 5: Elasticity and Its Application

Fiona's Fish Emporium increased its total monthly revenue from $1,500 to $1,800 when it raised the price of tropical fish from $5 to $9. The price elasticity of demand for Fiona's Fish Emporium is

At price of $1.20, a local pencil manufacturer is willing to supply 150 boxes per day. At a price of $1.40, the manufacturer is willing to supply 170 boxes per day. Using the midpoint method, the price elasticity of supply is about

Figure 5-4 -Refer to Figure 5-4. If the price increases in the region of the demand curve between points A and B, we can expect total revenue to

Holding all other forces constant, when the price of gasoline rises, the number of gallons of gasoline demanded would fall substantially over a ten-year period because

The demand for bread is likely to be more elastic than the demand for solid-gold bread plates.

Elasticity of demand is closely related to the slope of the demand curve. The more responsive buyers are to a change in price, the

Which of the following could be the price elasticity of demand for a good for which a decrease in price would decrease revenue?

Scenario 5-2 The supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tax increase decreases the demand for both goods by 10%. -Refer to Scenario 5-2. The equilibrium quantity will

If the price elasticity of supply is zero, then

As the price elasticity of supply approaches infinity, very small changes in price lead to

Figure 5-17 -Refer to Figure 5-17. Which of the following statements is correct?

The discovery of a new hybrid wheat would increase the supply of wheat. As a result, wheat farmers would realize an increase in total revenue if the

Charles purchases 20 basketball tickets per year when his annual income is $50,000 and 25 basketball tickets when his annual income is $60,000. Charles's income elasticity of demand for basketball ticket is

In which of the following situations will total revenue increase?

Generally, a firm is more willing and able to increase quantity supplied in response to a price change when

Figure 5-5 -Refer to Figure 5-5. Using the midpoint method, demand is unit elastic between prices of

Moving downward and to the right along a linear demand curve, we know that total revenue

Danita rescues dogs from her local animal shelter. When Danita's income rises by 7 percent, her quantity demanded of dog biscuits increases by 12 percent. For Danita, the income elasticity of demand for dog biscuits is

Which of the following could be the price elasticity of demand for a good for which a decrease in price would increase revenue?

Figure 5-3 -Refer to Figure 5-3. Mark says he would buy one Mt. Dew per day regardless of the price. If this is true, then Mark's demand for Mt. Dew is represented by demand curve