Exam 4: Elasticity

On most days the price of a rose is $1 and 80 roses are purchased. On Valentine's Day the demand increases so that the price of a rose rises to $2 and 320 roses are purchased. Therefore, the price elasticity of

In the summer 2012 the lobster catch in Maine was especially large, but instead of celebrating the fisherman were suffering from a lower total revenue. (Source: New York Times, July 28, 2012) As the lobster catch increases, there is

If the cross elasticity of demand between goods A and B is positive

A supply curve that is horizontal reflects a supply that

The price elasticity of demand for purses is measured in what units?

If the quantity demanded of a good decreases by 10 percent when the price of the good increases by 5 percent, the elasticity of demand is -2.00.

For Product X, the income elasticity of demand is -2.56. Which of the following is therefore TRUE?

The more substitutes available for a product, the

Suppose tennis shoes cost $50 per pair and firms supply 50,000 pairs of shoes. If the price decreases to $45 and firms decide to supply 48,000, the elasticity of supply equals

A normal good is defined as a good for which the demand curve

As income rises, the share of income spent on food in the United States

The income elasticity of demand is largest for

If a 6 percent decrease in the price leads to a 5 percent increase in the quantity demanded, the price elasticity of demand is

If the demand curve for oranges is a downward sloping straight line, the price elasticity of demand will increase the

Last year, after Shirley received a 14 percent pay increase, she increased the quantity of pork chops she purchased by 6 percent. Hence, her income elasticity of demand for pork chops equals

When the demand for a good is perfectly elastic, ________.

You are the new vice president in charge of advertising at Taco Bell. In your upcoming advertising campaign, you plan to degrade the fast food competitor whose product is the closest substitute for Taco Bell's tacos. That would be the fast food chain whose cross elasticity of demand with your tacos is equal to

If the percentage change in quantity demanded is greater than the percentage change in price, can you determine if the demand is elastic, unit elastic, or inelastic? Explain your answer.

If the price of a movie ticket increases by 4 percent and the quantity of movies demanded falls by 2 percent, the price elasticity of demand is

Suppose that the quantity of root beer demanded declines from 103,000 gallons per week to 97,000 gallons per week as a consequence of a 10 percent increase in the price of root beer. The price elasticity of demand is