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

When the price of a good is $5,the quantity demanded is 100 units per month;when the price is $7,the quantity demanded is 80 units per month.Using the midpoint method,the price elasticity of demand is about

Last year,Jim bought 8 tickets to sporting events when his income was $30,000.This year,his income is $33,000,and he purchased 10 tickets to sporting events.Holding other factors constant and using the midpoint method,it follows that Jim's income elasticity of demand is about

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

If the price elasticity of demand for a good is 0.2,then a 3 percent decrease in price results in a

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

The cross-price elasticity of demand can tell us whether goods are

If the price of gasoline rises,when is the price elasticity of demand likely to be the highest?

You and your college roommate eat three packages of Ramen noodles each week.After graduation last month,both of you were hired at several times your college income.You still enjoy Ramen noodles very much and buy even more,but your roommate plans to buy fewer Ramen noodles in favor of foods she prefers more.When looking at income elasticity of demand for Ramen noodles,yours would

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

For which of the following types of goods would the income elasticity of demand be positive and relatively large?

When the price of an eBook is $15.00,the quantity demanded is 400 eBooks per day.When the price falls to $10.00,the quantity demanded increases to 700.Given this information and using the midpoint method,we know that the demand for eBooks is

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

Which of the following expressions is valid for the price elasticity of demand?

You have just been hired as a business consultant to determine what pricing policy would be appropriate to increase the total revenue of a bakery.The first step you would take would be to

For a good that is a luxury,demand

Figure 5-4 -Refer to Figure 5-4.If the price increases in the region of the demand curve between points A and B,we can expect total revenue to

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

Which of the following is not possible?

Total revenue

The midpoint method is used to compute elasticity because it