Exam 5: Elasticity: a Measure of Response

The price elasticity of demand for gasoline in the short run has been estimated to be -0.1.If a war in the Middle East causes the price of oil (from which gasoline is made) to increase, how will that affect total expenditures on gasoline in the short run, all other things unchanged?

The cross price elasticity of demand of substitute goods is:

For a normal good, income elasticity of demand will be:

Which factor is the most important in determining the price elasticity of supply?

The cross price elasticity of demand for fuel with respect to the price of transport (e.g., automobile travel including insurance, etc.) has been estimated to be -0.48.If the price of transport increases by 5 percent in a period, how will that affect the demand for fuel in that period, all other things unchanged?

Use the following for questions 124-127. Exhibit: Estimating Price Elasticity -(Exhibit: Estimating Price Elasticity) The demand curve D₄ shows that:

A unit price elastic demand exists if a 10 percent change in the price of a good results in a percentage change (in absolute value terms) in quantity demanded that is:

Use the following to answer question(s): Demand and Price Elasticity 2 -(Exhibit: Demand and Price Elasticity 2) The price elasticity of demand between points B and C is:

To say that two goods are substitutes, their cross price elasticities of demand should be:

Use the following for questions 108-115. Exhibit: The Demand for Bungalow Bob's Bagels -(Exhibit: The Demand for Bungalow Bob's Bagels) Demand is price inelastic between:

Discuss and explain normal and inferior goods using the concept of income elasticity of demand.

If the demand for golf is price inelastic and your local public golf course increases the greens fees for using the course, you would expect:

If changes in price and total revenue move in opposite directions, then demand is price inelastic in that portion of the demand curve.

Income elasticity of demand measures:

A linear demand curve will have a price elasticity of demand whose absolute value:

Use the following to answer question(s): -(Exhibit: Demand and Price Elasticity 1) What is the price elasticity of demand between $1.75 and $1.50?

The income elasticity of demand for ground beef has been estimated to be -0.197.If income falls by 10 percent in a period, how will that affect total expenditures on ground beef in that period, all other things unchanged?

If the price of a good is increased by 15 percent and the quantity demanded falls by 20 percent, the price elasticity of demand is:

The price elasticity of demand for milk has been estimated to be somewhere between -0.49 and -0.63.If a new system of feeding and milking cows yields a 15 percent increase in the production of milk throughout the country, how will that affect total expenditures on milk, all other things unchanged?

If the price elasticity of demand is found to be -3/4, then demand is: