Exam 6: Elasticities

The nation's largest cable TV company tested the effect of a price reduction for premium movie channels.It increased prices from $9.95 to $12 and found virtually no change in the number of customers.This means:

You have been hired by the city to determine whether or not an increase in the price of tickets for the mass transit system would raise system revenues.The debate has been heated and the city council seems to be divided.One side argues that in order to increase revenues from the transit system,prices must be increased.The opposing side argues that a price increase at this time will lower revenues.What assumptions are each side making about the price elasticity of demand,and how might you determine the best course of action?

If the supply of good A is perfectly elastic,a decrease in demand will:

Exhibit 6-4 Refer to Exhibit 6-4.Graph B represents a demand curve that is relatively ____.Total revenue ____ as the price decreases from $10 to $5.

If the elasticity of demand for bagels is equal to 1,moving along the demand curve for bagels,an increase in price will:

The current supply of Rembrandt paintings:

The Book Nook reduces prices by 20%.If the dollar value of The Book Nook's sales remain constant,it indicates that:

What type of demand curve is depicted by the graph below?

The elasticity of supply coefficient for lobster is estimated to be equal to 0.6.It is expected,therefore,that a 10% decrease in price would lead to:

Which of the following is associated with inelastic demand?

If the demand for apples is highly elastic and the supply is highly inelastic,then if a tax is imposed on apples it will be paid:

Hot dogs and hot dog buns are complementary goods.The cross price elasticity between hot dogs and hot dog buns:

The following schedule represents a portion of Kate's demand for sub sandwiches. Along this portion of Kate's demand curve for sub sandwiches,price elasticity of demand is:

If two goods both had positive cross elasticities and positive income elasticities,

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

Which of the following goods would be most likely to feature an income elasticity of zero?

If the short run elasticity of demand for bus service is 1.01,we would expect the long run elasticity of demand to be:

Which of the following pairs of goods would most likely exhibit a cross price elasticity of 2.2?

Which of the following is false?

If the estimated elasticity of supply coefficient equals 0.85,then: