Exam 4: Elasticity

As the price for some product decreases from $4.00 to $3.00 per unit,quantity demanded increases from 400 to 500 units per day.For this segment of the demand curve,the price elasticity of demand is

Suppose a decrease in world demand for potash (used in the production of fertilizer)decreases the price from $400 per tonne to $240 per tonne.Annual Canadian production decreases from 12 million tonnes to 8 million tonnes.What is the elasticity of supply of Canadian potash?

What does the following statement imply about price elasticity of demand? "Government tries to reduce cigarette consumption with an extra 50 cent tax per pack.Policy raises government revenue but fails to curb smoking."

Every month Olivier buys exactly 6 take-out pizzas even though the price may fluctuate significantly.Apparently,Olivier's price elasticity of demand for take-out pizza is

Which of the following statements would you expect to be true about the demand elasticities for cornflakes and food?

For a normal good,the quantity demanded

For which of the following pairs of products would we expect the cross elasticity of demand to be negative?

If the income elasticity of demand for a good is - 3.4,a 25% increase in income results in

If the demand for some good fluctuates,but supply is constant,then which of the following combinations would generally yield the greatest price fluctuations?

If demand is unit elastic at all prices,then the demand curve is

Normal goods

The table below shows the demand schedule for museum admissions in a small city. TABLE 4-1 -Refer to Table 4-1.The elasticity of demand for museum admissions is

Demand Schedule for Ski Tickets TABLE 4-2 -Refer to Table 4-2.The price elasticity of demand over the interval of the demand curve between prices of $40 and $20 is

FIGURE 4-2 -Refer to Figure 4-2.In diagram 1,the elasticity of demand at $10 is

An inferior good has

Suppose the cross-elasticity of demand for two goods,domestic cheese and imported cheese,is positive.If the price of imported cheese falls,then quantity demanded will

Suppose you are shown two intersecting demand curves that are drawn on the same scale.At the point of intersection,one of the demand curves is steeper than the other.Which of the following could explain the difference in slopes?

Suppose Statistics Canada reports that total income earned by Canadian barley farmers has declined as a result of a partial crop failure that has driven up the Canadian price of barley.We can conclude that the price elasticity of demand for barley in Canada is

Suppose you are advising the government on changes in the gasoline market.The current price is $1.00 per litre and the long-run price elasticity of demand is constant at 0.8.If a tax on gasoline causes the price to rise to $1.50 per litre,then quantity demanded is predicted to fall in the long run by

Consider an excise tax imposed on daily parking charges in the downtown of a small city.Before the imposition of the tax,equilibrium price and quantity are $15 and 100 cars parked.(P = $15,Q = 100).The city government imposes a tax of $3 per car parked per day.Market equilibrium adjusts to P = $16 and Q = 95.After imposition of the tax,what is the daily after-tax price received by the seller per car parked?