Exam 5: Elasticity and Its Application

Suppose that 50 ice cream cones are demanded at a particular price.If the price of ice cream cones rises from that price by 4 percent,the number of ice cream cones demanded falls to 46.Using the midpoint approach to calculate the price elasticity of demand,it follows that the

Which of the following is not possible?

Using the midpoint method,the price elasticity of demand for a good is computed to be approximately 2.Which of the following events is consistent with a 0.1 percent increase in the price of the good?

If the price elasticity of supply for wheat is less than 1,then the supply of wheat is

Table 5-4 -Refer to Table 5-4.As price rises from $10 to $12,the price elasticity of demand using the midpoint method is approximately

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

On a downward-sloping linear demand curve,total revenue reaches its maximum value at the

Table 5-5 The following table shows a portion of the demand schedule for a particular good at various levels of income. -Refer to Table 5-5.Using the midpoint method,when income equals $5,000,what is the price elasticity of demand between $8 and $12?

A key determinant of the price elasticity of supply is the

Figure 5-8 -Refer to Figure 5-8.For prices below $5,demand is price

The price elasticity of demand measures how much

An increase in price causes an increase in total revenue when demand is

Scenario 5-4 Suppose the government is concerned about firms in the United States importing illegal caviar.As a result,the government increases border patrols to catch illegal shipments.U.S.Customs agents perform DNA testing on the caviar to determine if it comes from endangered species of fish.If so,the government destroys the caviar. -Refer to Scenario 5-4.What would we expect to observe in the caviar market?

Figure 5-4 -Refer to Figure 5-4.If the price decreases in the region of the demand curve between points A and B,we can expect total revenue to

Economists compute the price elasticity of demand as the

If the demand for textbooks is inelastic,then an increase in the price of textbooks will

Suppose a producer is able to separate customers into two groups,one having an inelastic demand and the other having an elastic demand.If the producer's objective is to increase total revenue,she should

When consumers face rising gasoline prices,they typically

When quantity demanded responds strongly to changes in price,demand is said to be

Table 5-2 -Refer to Table 5-2.Using the midpoint method,if the price falls from $80 to $60,the absolute value of the price elasticity of demand is