Exam 5: Elasticity and Its Application

If the price elasticity of demand is equal to 1,then demand is unit elastic.

Suppose that 50 hot dogs are demanded at a particular price.If the price of hot dogs rises from that price by 5 percent,the number of hot dogs demanded falls to 48.Using the midpoint approach to calculate the price elasticity of demand,it follows that the

On a certain supply curve,one point is (quantity supplied = 200,price = $2.00)and another point is (quantity supplied = 250,price = $2.50).Using the midpoint method,the price elasticity of supply is about

When the Shaffers had a monthly income of $4,000,they usually ate out 8 times a month.Now that the couple makes $4,500 a month,they eat out 10 times a month.Compute the couple's income elasticity of demand using the midpoint method.Explain your answer.Is a restaurant meal a normal or inferior good to the couple?

Demand is inelastic if the price elasticity of demand is greater than 1.

The demand for Hubba Bubba bubble gum is likely

Suppose demand is perfectly elastic,and the supply of the good in question decreases.As a result,

When demand is unit elastic,price elasticity of demand equals

Figure 5-6 -Refer to Figure 5-6.Which of the following price changes would result in no change in sellers' total revenue?

Assume that a 4 percent decrease in income results in a 6 percent increase in the quantity demanded of a good.The income elasticity of demand for the good is

Table 5-6 -Refer to Table 5-6.Using the midpoint method,what is the income elasticity of demand for good X?

An increase in the price of cheese crackers from $2.25 to $2.45 per box causes suppliers of cheese crackers to increase their quantity supplied from 125 boxes per minute to 145 boxes per minute.Using the midpoint method,supply is

There are very few,if any,good substitutes for motor oil.Therefore,the

The supply of a good will be more elastic,the

Figure 5-4 -Refer to Figure 5-4.The section of the demand curve from A to B represents the

If an increase in income results in a decrease in the quantity demanded of a good,then for that good,the

You and your college roommate eat three packages of Ramen noodles each week.After graduation last month,both of you were hired at several times your college income.Your roommate still enjoys Ramen noodles very much and buys even more,but you plan to buy fewer Ramen noodles in favor of foods you prefer more.When looking at income elasticity of demand for Ramen noodles,yours would

For a particular good,a 10 percent increase in price causes a 15 percent decrease in quantity demanded.Which of the following statements is most likely applicable to this good?

Figure 5-4 -Refer to Figure 5-4.Assume the section of the demand curve from A to B corresponds to prices between $6 and $12.Then,when the price increases from $8 to $10,

Figure 5-10 -Refer to Figure 5-10.When price falls from $50 to $40,demand is