Exam 4: Elasticity

When the price elasticity of demand for a good equals

The worst drought in over 50 years has decimated crops of soy beans and corn in the United States. (Source: New York Times, August 10, 2012). Because the production of corn has decreased, prices are expected to increase by 25 percent. These data are insufficient for calculating the elasticity of demand because we also need to know the

Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds. Using the midpoint method, what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?

If the quantity demanded of hamburgers increases by 20 percent when the price decreases by 5 percent, then the price elasticity of demand is

The supply of lettuce in the short run will be ________ than the supply in the long run and ________ than the supply today.

The income elasticity of demand for restaurant meals is 1.61. So

Most corn produced in the United States is used for animal feed. The demand for corn is inelastic. These facts mean that

-The table above gives the demand schedule for peas. Between point A and point B, the price elasticity of demand equals

If the price of one good increases by 3 percent and the quantity demanded of another good increases by 2 percent, the cross elasticity is ________ and the two goods are ________.

-The figure above illustrates a linear demand curve. If the price falls from $6 to $4

When the price of bananas rises 2 percent, the quantity demanded of peanut butter falls 4 percent. a) What is the cross elasticity of demand between these two goods? b) How are these goods related? c) If the price of bananas rises, how will that affect the demand curve for peanut butter?

A decrease in the price of eggs from $1.50 to $1.30 per dozen resulted in an increase in egg purchases in two cities. In Philadelphia, daily egg purchases increased from 6000 to 8000 dozens; in nearby Dover, Delaware, daily egg purchases increased from 300 to 400 dozens. The price elasticity of demand is therefore

If an increase in price results in no change in total revenue, then demand must be

Producers' total revenue will decrease if

-The above table gives the demand schedule for Billy Bob's BBQ ribs. An increase in the price of a pound of ribs will lead to a decrease in total revenue when

Suppose Sandy's Candies wants to increase its total revenues. If Sandy increases the price of her candy, she must be assuming that the demand for candy is

"Last October, due to an early frost, the price of a pumpkin increased by 10 percent compared to the price in the previous Halloween season. As a result, the quantity demanded county-wide decreased from 2 million to 1.5 million." Based on this statement, it is certain that the

Along a straight-line demand curve, as the price falls the

The concept of elasticity of supply measures the responsiveness of the

Bus rides and canned soup are inferior goods, so the ________ elasticity of demand is ________.