Exam 5: Elasticity and Its Application

Suppose that 500 candy bars are demanded at a particular price.If the price of candy bars rises from that price by 10 percent,the number of candy bars demanded falls to 480.Using the midpoint approach to calculate the price elasticity of demand,it follows that the

Which of the following was not a reason OPEC failed to keep the price of oil high?

While in college,John and Bethany each buy five packages of mac-n-cheese per week.After they graduate and have full-time jobs,John buys six packages per week,but Bethany buys only two packages per week.When looking at income elasticity of demand for mac-n-cheese,John's

If the price of calculators increases by 15 percent and the quantity demanded per week falls by 45 percent as a result,then the price elasticity of demand is 3.

Figure 5-13 -Refer to Figure 5-13.Over which range is the supply curve in this figure the least elastic?

Figure 5-3 -Refer to Figure 5-3.Which demand curve is perfectly inelastic?

Figure 5-10 -Refer to Figure 5-10.An increase in price from $30 to $35 would

A drug interdiction program that successfully reduces the supply of illegal drugs in the United States likely will

Figure 5-2 -Refer to Figure 5-2.As price falls from Pa to Pb,we could use the three demand curves to calculate three different values of the price elasticity of demand.Which of the three demand curves would produce the smallest elasticity?

The demand for gasoline will respond more to a change in price over a period of five weeks than over a period of five years.

If a 20% increase in price for a good results in a 15% decrease in quantity demanded,the price elasticity of demand is

Suppose that two supply curves pass through the same point.One is steep,and the other is flat.Which of the following statements is correct?

Scenario 5-1 Suppose that the supply of aged cheddar cheese is inelastic,and the supply of bread is elastic.Both goods are considered to be normal goods by a majority of consumers.Suppose that a large income tax increase decreases the demand for both goods by 10%. -Refer to Scenario 5-1.The price elasticity of supply for bread could be

In general,demand curves for luxuries tend to be price elastic.

Figure 5-1 -Refer to Figure 5-1.Between point A and point B,the slope is equal to

In the long run,the quantity supplied of most goods

Even the demand for a necessity such as gasoline will respond to a change in price,especially over a longer time horizon.

Which of the following statements is correct?

Scenario 5-2 The supply of aged cheddar cheese is inelastic,and the supply of bread is elastic.Both goods are considered to be normal goods by a majority of consumers.Suppose that a large income tax increase decreases the demand for both goods by 10%. -Refer to Scenario 5-2.The change in equilibrium quantity will be

The income elasticity of demand for caviar tends to be