Exam 6: Elasticity: the Responsiveness of Demand and Supply

Suppose that when the price per ream of recycled printer paper rises from $4 to $4.50,the quantity demanded falls from 800 to 600 reams per day.Using the midpoint formula,what is the price elasticity of demand (in absolute value)over this range?

If the quantity supplied of walkie-talkies increases by 5 percent when prices increase by 12 percent,then

If demand is inelastic,the absolute value of the price elasticity coefficient is greater than one.

As gasoline prices increased throughout 2010 and into 2011,consumers began to explore alternatives to driving their cars and more people eventually ended up using public transportation.This exemplifies that for a specific product,the longer the time period involved,

From 1950 to 2011 the number of people who lived on farms fell from 23 million to fewer than 3 million? Which of the following factors have contributed to this trend?

Between 1950 and 2011 the productivity of wheat farmers in the United States more than doubled.This means that

If the absolute value of the price elasticity of demand for DVD movies is 0.8 then the elasticity of demand for the DVD for the movie The Hangover should be

Which of the following statements is true?

The demand for The Federalist Papers is likely to be more elastic than the demand for a best-selling mystery novel.

Which of the following pairs of goods is likely to have a negative cross-price elasticity of demand?

The government of Bassaland is looking for new revenue sources.It is considering imposing an excise tax on two goods: palm wine and diapers.If the price elasticity of demand for the goods are -0.47 and -1.89 respectively,which good should it tax if the goal is to raise revenue? If the government wants to tax only one good,which good should it tax if the goal is to discourage consumption? Explain your answer.

Assume that the demand curve for sunblock is linear and downward sloping.Which of the following statements about the slope of the demand curve for sunblock and the price elasticity of demand for sunblock are true?

Table 6-5 The town of Bloomfield is well known for its basketball team.The price of basketball game tickets is determined by market forces.Table 6-5 above shows the demand and supply schedules for basketball games tickets. -Refer to Table 6-5.What is the most distinctive feature of the supply curve?

The paradox of American farming is

The estimated price elasticities of demand for the products listed in the table as "Product A" are from Table 6-2 in the text.Indicate whether the products listed as "Product B" will have a more elastic or less elastic demand than the corresponding Product A.

The current price of canvas messenger bags is $36 each and sales of the bags equal 400 per week.If the price elasticity of demand is -2.5 and the price changes to $44,how many messenger bags will be sold per week? Use the midpoint formula.

Which of the following could explain why the demand for table salt is inelastic?

Which of the following is not a determinant of a good's price elasticity of demand?

Suppose you have surveyed a few industries and obtained information about the income elasticity of demand for their products.If you expect that the economy is headed for a long recession,you would advise people to look for jobs in an industry with

The absolute value of the price elasticity of demand for telescopes is 1.5.Therefore,telescopes can be classified as a luxury.