Exam 6: Elasticity: the Responsiveness of Demand and Supply

When the price of tortilla chips rose by 10 percent,the quantity of tortilla chips sold fell 4 percent,and the sale of dips (like salsa and bean dip)fell 8 percent.This set of facts indicates that

The price elasticity of demand for Kellogg's Raisin Bran is larger in absolute value than the price elasticity for all breakfast cereals.

Suppose the cross-price elasticity of demand between DVDs at Amazon.com and DVDs at Buy.com is 3.5.Based on this information,predict what happens when Amazon.com lowers its DVD prices by 10 percent.

In May 2011,the average price of gasoline in the United States was $3.76 per gallon,and consumers purchased nearly 5 percent less gasoline than they had during May 2010,when the average price of gasoline was $2.79 per gallon.Based on these figures,from May 2010 to May 2011,the demand for gasoline was

Consider the following pairs of items: a.shampoo and conditioner B.iPhones and earbuds C.a laptop computer and a desktop computer D.beef and pork E.air-travel and weed killer Which of the pairs listed will have a positive cross-price elasticity?

During an economic expansion as consumer incomes rise,holding everything else constant,

If tolls on a toll road can be raised significantly before commuters will consider using a free alternative,then an increase in tolls will result in

Assume that you own a small boutique hotel.In an attempt to raise revenue you reduce your rates by 20 percent.However,your revenue falls.What does this indicate about the demand for your boutique hotel rooms?

If the demand for a product is elastic,the quantity demanded changes by a smaller percentage than the percentage change in price.

Assume that the price elasticity of demand for gasoline is -0.06.If the government tax causes the price of gasoline to increase by 50 percent,what will be the decrease in the quantity of gasoline demanded?

Opera Estate Girls' School is considering increasing its tuition to raise revenue.If the school believes that raising tuition will increase revenue

A supply curve that is vertical

The cross-price elasticity between Gillette razors and a related good is -3.4.What happens to the demand for the related good if the price of Gillette razors falls by 10 percent?

The price elasticity of demand is equal to

Figure 6-3 -Refer to Figure 6-3.Between points a and b on the demand curve,demand is

If the absolute value of the price elasticity of demand for aspirin equals 0.8 then

If demand is perfectly elastic,the absolute value of the price elasticity coefficient is

Holding everything else constant,the absolute value of the price elasticity of demand for Saucony tennis shoes is ________ the price elasticity of demand for tennis shoes.

In 2001,the prices of VHS movie tapes were practically identical while DVD prices for different movie titles varied considerably.What explanation can be given for this?

Which of the following statements is true?