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

Figure 5-7 -Refer to Figure 5-7.For prices below $5,demand is price

Figure 5-3 -Refer to Figure 5-3.Which demand curve is perfectly inelastic?

If the quantity demanded of a certain good responds only slightly to a change in the price of the good,then the

For which pairs of goods is the cross-price elasticity most likely to be positive?

Suppose that when the price of good X increases from $800 to $850,the quantity demanded of good Y increases from 65 to 70.Using the midpoint method,the cross price elasticity of demand is about

Figure 5-4 -Refer to Figure 5-4.Assume the section of the demand curve from B to C corresponds to prices between $0 and $15.Then,when the price changes between $7 and $9,

Holding all other forces constant,if increasing the price of a good leads to a decrease in total revenue,then the demand for the good must be

As we move downward and to the right along a linear,downward-sloping demand curve,

There are very few,if any,good substitutes for automotive tires.Therefore,the demand for automotive tires would tend to be

The demand for Godiva mint chocolates is likely quite elastic because

Figure 5-4 -Refer to Figure 5-4.Suppose the point labeled B is the "halfway point" on the demand curve and it corresponds to a price of $5.00.Then,between prices of $4.99 and $5.01,the price elasticity of demand is

Demand is elastic if the price elasticity of demand is

Figure 5-4 -Refer to Figure 5-4.The section of the demand curve from B to C represents the

Consider luxury weekend hotel packages in Las Vegas.When the price is $250,the quantity demanded is 2,000 packages per week.When the price is $280,the quantity demanded is 1,700 packages per week.Using the midpoint method,the price elasticity of demand is about

Economists compute the price elasticity of demand as the

Hilda's Hair Hysteria earned $3,750 in total revenue last month when it sold 125 haircuts.This month it earned $3,600 in total revenue when it sold 90 haircuts.The price elasticity of demand for Hilda's Hair Hysteria is

Suppose demand is perfectly elastic,and the supply of the good in question decreases.As a result,

Suppose there is a 6 percent increase in the price of good X and a resulting 6 percent decrease in the quantity of X demanded.Price elasticity of demand for X is

The case of perfectly elastic demand is illustrated by a demand curve that is

If the price of walnuts rises,many people would switch from consuming walnuts to consuming pecans.But if the price of salt rises,people would have difficulty purchasing something to use in its place.These examples illustrate the importance of