Exam 5: Elasticity and Its Applications: The Elasticity of Demand

A good will have a more inelastic demand,the

While in college,John and Bethany each buy five packages of mac-n-cheese per week.After they graduate and have full-time jobs,John buys six packages per week,but Bethany buys only two packages per week.When looking at income elasticity of demand for mac-n-cheese,John's

Which of the following is likely to have the most price inelastic demand?

Figure 5-5 -Refer to Figure 5-5.Using the midpoint method,demand is unit elastic between prices of

If the cross-price elasticity of two goods is negative,then the two goods are

For which of the following goods is the income elasticity of demand likely highest?

Cross-price elasticity of demand measures how

Suppose that 50 ice cream cones are demanded at a particular price.If the price of ice cream cones rises from that price by 4 percent,the number of ice cream cones demanded falls to 46.Using the midpoint approach to calculate the price elasticity of demand,it follows that the

Figure 5-5 -Refer to Figure 5-5.At a price of $50 per unit,sellers' total revenue equals

Suppose that 50 hot dogs are demanded at a particular price.If the price of hot dogs rises from that price by 5 percent,the number of hot dogs demanded falls to 48.Using the midpoint approach to calculate the price elasticity of demand,it follows that the

Assume that a 4 percent decrease in income results in a 6 percent increase in the quantity demanded of a good.The income elasticity of demand for the good is

For a particular good,a 2 percent increase in price causes a 12 percent decrease in quantity demanded.Which of the following statements is most likely applicable to this good?

Demand is said to be inelastic if the

Figure 5-12 -Refer to Figure 5-12.If the price decreased from $36 to $12,total revenue would

Figure 5-4 -Refer to Figure 5-4.Assume,for the good in question,two specific points on the demand curve are (Q = 1,000,P = $40)and (Q = 1,500,P = $30).Then which of the following scenarios is possible?

Figure 5-11 -Refer to Figure 5-11.If price increases from $10 to $20,total revenue will

Figure 5-8 -Refer to Figure 5-8.An increase in price from $10 to $15 would

Suppose you are in charge of setting prices at a local ice cream shop.The business needs to increase its total revenue,and your job is on the line.You evaluate the data and determine that the price elasticity of demand for ice cream at your shop is 1.8.You should

Josh mows lawns.If the demand for lawn-mowing service is elastic and Josh wants to increase his total revenue,he should

Figure 5-5 -Refer to Figure 5-5.Using the midpoint method,between prices of $50 and $60,price elasticity of demand is about