Exam 5: Elasticity and Its Application

The supply of oil is likely to be

If the quantity supplied responds only slightly to changes in price,then

When demand is elastic,a decrease in price will cause

Which of the following statements is valid when the market supply curve is vertical?

Normal goods have negative income elasticities of demand,while inferior goods have positive income elasticities of demand.

In which of these instances is demand said to be perfectly inelastic?

A manufacturer produces 1,000 units,regardless of the market price.For this firm,the price elasticity of supply is

Figure 5-13 -Refer to Figure 5-13.Using the midpoint method,what is the price elasticity of supply between $16 and $40?

For which pairs of goods is the cross-price elasticity most likely to be negative?

Goods with many close substitutes tend to have

Charles purchases 20 basketball tickets per year when his annual income is $50,000 and 25 basketball tickets when his annual income is $60,000.Charles's income elasticity of demand for basketball ticket is

Which of the following is likely to have the most price elastic demand?

Elasticity measures how responsive quantity is to changes in price.

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

Figure 5-5 -Refer to Figure 5-5.Using the midpoint method,between prices of $12 and $18,price elasticity of demand is

For a particular good,a 2 percent increase in price causes a 12 percent decrease in quantity demanded.Which of the following statements is most likely applicable to this good?

Good news for farming can be bad news for farmers because 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,at a price of $12,what is the income elasticity of demand when income rises from $5,000 to $10,000?

Goods with close substitutes tend to have more elastic demands than do goods without close substitutes.

If a t-shirt manufacturer supplies 1,000 t-shirts per week when the price of t-shirts is $10 and supplies 1,200 t-shirts per week when the price of t-shirts is $12,the price elasticity of supply is 2.