Exam 5: Elasticity and Its Application

Which of the following is likely to have the most price inelastic demand?

Last year,Joan bought 50 pounds of hamburger when her household's income was $40,000.This year,her household income was only $30,000 and Joan bought 60 pounds of hamburger.All else constant,Joan's income elasticity of demand for hamburger is

Figure 5-5 -Refer to Figure 5-5.Using the midpoint method,between prices of $30 and $36,price elasticity of demand is about

Jean-Paul says that he will spend exactly 75 cents a day on M&Ms,regardless of the price of M&Ms.Jean-Paul's demand for M&Ms is

If a supply curve is horizontal,then supply is said to be perfectly elastic,and the price elasticity of supply approaches infinity.

Suppose good X has a negative income elasticity of demand.This implies that good X is

For Susie,a 7 percent increase in income results in a 12 percent increase in the quantity demanded of pizza.For Susie,the income elasticity of demand for pizza is

Knowing that the demand for wheat is inelastic,if all farmers voluntarily did not plant wheat on 10 percent of their land,then

Table 5-1 -Refer to Table 5-1.Which of the following is consistent with the elasticities given in Table 5-2?

Scenario 5-3 Milk has an inelastic demand and beef has an elastic demand.Suppose that a mysterious increase in bovine infertility decreases both the population of dairy cows and the population of beef cattle by 50 percent. -Refer to Scenario 5-3.Total consumer spending on milk will

Figure 5-16 -Refer to Figure 5-16.Which supply curve is most likely relevant over a very long period of time?

How does total revenue change as one moves downward and to the right along a linear demand curve?

OPEC successfully raised the world price of oil in the 1970s and early 1980s,primarily due to

Figure 5-6 -Refer to Figure 5-6.Which of the following price changes would result in no change in sellers' total revenue?

When demand is elastic,a decrease in price will cause

Last year,Sheila bought 6 pairs of shoes when her income was $40,000.This year,her income is $52,000 and she purchased 7 pairs of shoes.Holding other factors constant and using the midpoint method,it follows that Sheila's income elasticity of demand is about

For which of the following types of goods would the income elasticity of demand be positive and relatively large?

If a 40% change in price results in a 25% change in quantity supplied,then the price elasticity of supply is

Figure 5-15 -Refer to Figure 5-15.Using the midpoint method,what is the price elasticity of supply between point B and point C?

If demand is perfectly inelastic,the demand curve is vertical,and the price elasticity of demand equals 0.