Exam 4: Elasticity: the Responsiveness of Demand and Supply

Figure 4-4 -Refer to Figure 4-4.Which of the following statements is true about the price elasticity of demand?

Most people buy salt infrequently and in small quantities.Even a doubling of the price of salt is likely to result in a small decline in the quantity of salt demanded.Therefore

At a price of $8 per dozen,Chuy sells 40 dozen homemade tamales per week.When he raised his price to $12 per dozen,he still sold 40 dozen per week.Based on this information,the demand for his tamales is

Consider the following types of demand curves: A.a vertical demand curve B.a horizontal demand curve C.a linear downward-sloping demand curve Which of the demand curves listed exhibits a price elasticity of demand coefficient that remains constant along the demand curve?

A supply curve that is vertical

Suppose when the price of jean-jackets increased by 10 per cent,the quantity supplied increased by 16 percent.Based on this information the price elasticity of supply of jean-jackets is

If a 5 per cent increase in income leads to a 10 per cent increase in quantity demanded for airline travel,then airline travel is

The price elasticity of supply for umbrellas is 2.Suppose you're told that following a price increase,quantity supplied increased by 30 per cent.What was the percentage change in price that brought this about?

Necessities tend to have more inelastic demands than luxuries.

If a firm wanted to know whether the demand for its product was elastic,unit-elastic,or inelastic,then the firm could

In recent years,the prices of new domestically produced cars have been falling.Suppose consumers respond by reducing their demand for used cars and mass transport services such as bus travel.This information suggests that the cross-price elasticity between new cars and used cars,and the cross-price elasticity between new cars and bus travel are negative.

Figure 4-8 -Refer to Figure 4-8.What is the value of the price elasticity of supply between g and h?

Economists estimated that the cross-price elasticity of demand for beer and wine is -0.83 and the income elasticity of wine is 5.03.This means that

According to a study of the price elasticities of products sold in supermarkets,the price elasticity of demand for toothpaste is estimated at -0.45.Which of the following could explain why the price elasticity of demand for toothpaste is so low?

Economists use the concept of ________ to measure how one economic variable,such as quantity,responds to a change in another economic variable,such as price.

Linesha,a university student working part-time,receives a wage increase.An avid movie buff,she increased her purchases of Blu-ray discs and reduced her purchases of DVDs.Based on this information,

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 is true?

The larger the share of a good in a consumer's budget,holding everything else constant,the

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?

Calculate the income elasticity if an 8 per cent increase in income leads to a 4 per cent increase in quantity demanded for organic produce.