Exam 6: Elasticities

The longer the time period considered,the elasticity of supply tends to:

If the demand is perfectly inelastic,what would happen to the quantity demanded if there is a tiny increase in price?

Good A has an income elasticity equal to 0.4 and a cross price elasticity with respect to Good B of 1.2.Then:

A jeweler cut prices in his store by 20% and the dollar value of his sales fell by 20%.This is indicative of:

Shanequa and Mya have a business that provides personal fitness training services.They know that after raising their prices from $50 to $75 per hour,the quantity of hours they spent delivering training services only fell from 45 to 40 hours per week.The demand for their services is:

Bailey's Barber Shop knows that a 5% increase in the price of their haircuts results in a 15% decrease in the number of haircuts purchased.What is the elasticity of demand facing Bailey's Barber Shop?

Exhibit 6-4 Refer to Exhibit 6-4.With reference to Graph A,at a price of $5,total revenue equals:

An increase in demand will increase the quantity sold but not the price in a market if:

If Pizza Hut decreases its price for a large pizza by 25% and this leads to a 75% increase in sales,we can conclude that demand is relatively elastic with regard to price.

Assume an industry initially in equilibrium has a price ceiling imposed at a price below the equilibrium price.Total revenue received by the producers from sales will:

A given increase in demand will raise the equilibrium quantity exchanged:

Calculate the cross-price elasticity of demand between computers and printers,where a 10 percent decrease in the price of computers results in a 15 percent increase in the demand for printers.

As we move down along a straight-line demand curve,demand becomes increasingly price elastic.

To assess whether or not a good is inferior,economists are interested in the cross price elasticity of demand.

A steel mill raises the price of steel by 7%,which results in a 20% reduction in the quantity of steel demanded.The demand curve facing this firm is:

The government proposes a tax on flowers in order to boost its revenue.Consumers will bear all of this tax if the:

For a given decrease in demand,the effect on price is smallest and the effect on quantity exchanged largest when:

Exhibit 6-2 Refer to Exhibit 6-2.Elasticity varies along a linear demand curve.Graph A represents the section of the curve where:

An increase in the price of good X due to a reduction in its supply will:

Given an upward sloping supply curve,the more inelastic is demand,the greater the fraction of the burden of taxation that is borne by the consumer.