Exam 4: Elasticity

There have been proposals that a tax be imposed on sugar-laden soft drinks in an attempt to reduce their consumption.Assume for simplicity that all bottled soft drinks are the same size.Suppose the initial market equilibrium is P = $2.00 and Q = 1000. FIGURE 4-4 -Refer to Figure 4-4.Suppose the government imposes a tax of $0.60 per soft drink purchased.Which of the following statements most accurately describes the economic incidence of this tax?

Demand Schedule for Ski Tickets TABLE 4-2 -Refer to Table 4-2.Using the data provided to plot the demand curve for ski tickets results in a ________ demand curve.Price elasticity along this demand curve is therefore ________ as price is falling.

Suppose the price elasticity of demand for some good is 1.4.A 10% increase in the price of the good results in

The "economic incidence" of an excise tax illustrates

Suppose a fast-food chain determines that the price elasticity of demand for its hamburgers is 0.75,and the price of the hamburger is currently $4.00.What will be the effect on quantity demanded and total expenditure on this chain's hamburgers if the price is increased to $6.00?

If total expenditure on a product rises and falls directly with a product's price,then demand for this product has an elasticity of

FIGURE 4-2 -Refer to Figure 4-2.There is good reason to suppose that,of the four goods whose demand curves are shown in diagrams 1-4 of the figure,the good that has the fewest close substitutes is shown in

If the income elasticity of demand for a good is 1.25,a 10% increase in income results in

Suppose the cross elasticity of demand for two goods,X and Y,is positive.If the price of Y falls,then quantity demanded will

Suppose that the quantity of a good demanded rises from 90 units to 110 units when the price falls from $1.20 to 80 cents per unit.The price elasticity of demand for this product is

FIGURE 4-2 -Refer to Figure 4-2.The price elasticity of demand is constant as price changes in diagram(s)

Suppose that the quantity demanded of paperback novels rises from 80 000 to 120 000 units per month when the price falls from $11 to $9 per unit.The price elasticity of demand for this product is

FIGURE 4-2 -Refer to Figure 4-2.The price elasticity of demand is continuously decreasing as the price falls in diagram(s)

Consider two demand curves and the same price change for both.If the resulting percentage change in quantity demanded is greater for one (D₁)than the other (D₂),we can conclude

Given that elasticity of supply changes over time,in the short run an increase in demand will generally cause

If the demand for a product has an income elasticity of -3.4,we can conclude that

What does the following statement imply about price elasticity of demand? "An unexpected spike in world oil prices leads to dramatic increase in revenue for the world's oil producers."

An increase in income will

If the total expenditure on photocopiers increases when the price of photocopiers rises,the price elasticity of demand is

If the total revenue of producers rises for an initial cut in the price of their product but falls for further reductions in price,the price elasticity of demand for the product