Exam 6: Demand and Elasticity

How would an increase in cigarette taxes succeed according to the following criteria: collecting a large amount of tax revenue; distorting demand as little as possible; discouraging consumption of harmful commodities?

The demand for French Roast coffee is likely to be

A rightward shift in the demand curve for a product will ordinarily result from

A correct formula (dropping all minus signs)for the calculation of the elasticity of demand between point Q₁,P₁ and point Q₂,P₂ is

If there are many close substitutes available for a good,its elasticity of demand will be higher.

If two goods are complements,their cross elasticity of demand will normally be

Scientific evidence suggests that consumption of foods rich in fiber lowers cholesterol.As a result,the demand for bran increases at every price by 5,000 bushels and the supply curve for bran is perfectly price elastic.The quantity of bran consumed will

Figure 6-7 -In Figure 6-7,which total expenditure curve belongs to a demand curve that is unit elastic throughout?

Which of the following goods will have the most elastic demand at any time?

Which of the following is more likely be the price elasticity of demand for anti-venom?

Demand is said to be elastic when percentage changes in quantity demanded are

An accurate demand curve can be derived by examining the quantities of a good that are sold over time as the price varies.

Figure 6-3 -Along the inelastic portion of a demand curve,the

The difference between slope and elasticity is that slope measures absolute change and elasticity measures percentage change.

Cross elasticity of demand for

A demand curve with an elasticity of 1.0 is a unit-elastic demand curve.

Sun City's public bus line has been operating at a deficit.The city decides to raise the fare from 50 cents to 75 cents,anticipating enough additional revenue to cover the deficit.What assumption is the city making about price elasticity?

Tele-Com,Inc.,the nation's largest cable TV company,tested the effect of a price reduction for the Disney Channel.It lowered prices from $10.75 to $7.95 and found that the number of customers more than doubled.This means the

As one moves down a straight-line demand curve away from the vertical axis,demand becomes less elastic and then inelastic.

Cross-elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good.