Exam 6: Elasticity: the Responsiveness of Demand and Supply

The price elasticity of supply of hot dog buns is estimated to be 1.5. Holding everything else constant, this means that a 10 percent decrease in the price of hot dog buns will cause the quantity of hot dog buns supplied to decrease by

Which of the following is one reason why the income of small family farms has decreased over time?

According to a study of the U.S. demand for alcoholic beverages, the price elasticity of demand for beer is -0.30. Which of the following could explain why the price elasticity of demand for beer is low?

List the five key determinants of price elasticity of demand and explain how each determinant indicates if demand tends to be elastic or inelastic.

Economists have estimated that the cross-price elasticity of demand between beer and spirits is -0.50, the income elasticity for spirits is 1.21 and the income elasticity for wine is 5.03. These elasticities mean that

Suppose the price elasticity of demand for cigarettes is -0.4. The FDA decides to regulate tobacco production, which increases the price of cigarettes and causes the quantity of cigarettes demanded to decrease by 25 percent. What is the percentage increase in price which would lead to the 25 percent decrease in quantity demanded? If the price elasticity was -4, what would be the percentage increase in price?

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

The cross-price elasticity of demand between an unlimited texting option and an unlimited call minutes option offered from a cell phone provider would be

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

If demand is inelastic, the absolute value of the price elasticity of demand is

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

If the demand for cell phone service is inelastic, then

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.

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

Figure 6-11 -Refer to Figure 6-11. What is the value of the price elasticity of supply between g and h?

Which of the following statements is true?

The price elasticity of supply is equal to

Figure 6-10 -Refer to Figure 6-10. A unit-elastic supply curve is shown in

What does price elasticity of demand measure? When is demand elastic? Inelastic? Unit elastic?

If the cross-price elasticity of demand for goods A and B is zero, this means the two goods are unrelated.