Exam 4: Elasticity: the Responsiveness of Demand and Supply

Over longer periods of time,increases in oil prices provide firms with incentives to explore and recover oil.What does this indicate about the long-run price elasticity of supply for oil?

Suppose that the price of a money clip increases from $0.75 to $0.90 and quantity supplied rises from 8000 units to 10000 Units.Use the midpoint formula to calculate the price elasticity of supply.

Figure 4-9 -Refer to Figure 4-9.Suppose the diagram shows the supply curves for a product in the short run and in the long run.Which supply curve represents supply in the short run and which curve represents supply in the long run?

If the slope of a demand curve is equal to -0.1,then

Suppose the supply curve for digital cameras shifts to the right.This will cause a relatively large decrease in the price of digital cameras if both demand and supply are inelastic.

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

The demand for petrol in the short run is

In the alcohol industry,both wine and spirits are considered to be substitutes for beer.

If the price elasticity of demand for insulin is equal to zero then the demand curve for insulin is

Studies show that the income elasticity of demand for wine is 5.03 and the income elasticity of demand for spirits is 1.21.This indicates that

If the percentage change in the quantity of teapots demanded is greater than the percentage change in the price of teapots,then

If a 6 per cent increase in income leads to a 4 per cent increase in quantity demanded for audio books the income elasticity of demand is

Assume that a 50 per cent petrol tax led to a large increase in its price and only a small decrease in the quantity of petrol demanded.Economic analysis would lead one to conclude that

Which of the following explains why a firm would be interested in the knowing the price elasticity of demand for a good it sells?

The process involved in bringing oil to world markets can take years.Substitutes for oil-based products such as petrol are limited.As a result

Suppose the demand curve for a product is represented by a typical downward-sloping curve.Now suppose the demand for this product increases.Which of the following statements accurately predicts the resulting increase in price?

What factors would make you more sensitive or less sensitive to price when purchasing petrol?

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

The price elasticity of demand for Stork ice cream is -4.Suppose you're told that following a price increase,quantity demanded fell by 10 per cent.What was the percentage change in price that brought about this change in quantity demanded?

If you expect the economy is going to boom and average income in the economy will rise in the foreseeable future,the type of firm that would be able to increase its sales if your expectations are met is