Exam 6: Elasticities

Moving along an elastic portion of a demand curve,the change in price will always be proportionately less than the change in the quantity demanded.

Which of the following is false?

Exhibit 6-1 The elasticity in the vicinity of five different points along a demand curve varies as follows: Refer to Exhibit 6-1.At which of these points would a price increase be accompanied by an increase in total revenue?

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

Supply is said to be ____ when the quantity supplied is not very responsive to changes in price.

Taxes on goods with ____ demand curves will tend to raise more tax revenue for the government than taxes on goods with ____ demand curves.

A movie theatre raises its admission prices by 10%,which results in a 10% reduction in the quantity of tickets demanded.The demand curve facing this firm is:

If the demand curve is perfectly inelastic,then an increase in supply will:

Calculate the income elasticity of demand for DVDs,where a 10 percent increase in income results in a 20 percent increase in the demand for DVDs.Decide from your answer,whether DVDs are normal or inferior goods.

When a 9% increase in price leads to a 6% increase in quantity supplied,supply is relatively inelastic.

A tax is imposed on orange juice.Consumers will bear the full burden of this tax if the:

If makers of snake anti-venom implement significant price increases,it is unlikely to significantly affect the use of anti-venom for treating poisonous snakebites.The demand for anti-venom among users is:

A price cut will decrease the total revenue a firm receives if the demand for its product is:

If the demand curve for a life-saving medicine is perfectly inelastic,a reduction in supply will cause the equilibrium price to:

If the demand curve is perfectly elastic,the elasticity coefficient is ____ and the curve is ____.

When demand is elastic:

If the demand curve is perfectly elastic,then an increase in supply will:

The measure used to determine whether two products are substitutes or complements is called the:

A 25% decrease in the price of breakfast cereal leads to a 20% increase in the quantity of cereal demanded.As a result:

When a 5% increase in price leads to an 8% increase in quantity supplied,supply is relatively inelastic.