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

When the price of good A is $50,the quantity demanded of good A is 500 units.When the price of good A rises to $70,the quantity demanded of good A falls to 400 units.Using the midpoint method,the price elasticity of demand for good A is

The local bakery makes such great cinnamon rolls that consumers do not respond much at all to a change in the price.If the owner is only interested in increasing revenue,she should

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

Which of the following statements is correct?

For a horizontal demand curve,

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

Assume that a 4 percent increase in income results in a 2 percent increase in the quantity demanded of a good.The income elasticity of demand for the good is

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

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

Suppose that demand is inelastic within a certain price range.For that price range,

Demand is inelastic if the price elasticity of demand is

The demand for grape-flavored Hubba Bubba bubble gum is likely

The price elasticity of demand measures how much

Which of the following could be the cross-price elasticity of demand for two goods that are complements?

There are very few,if any,good substitutes for motor oil.Therefore,the

Suppose a market has the demand function Q^d=20-0.5P.At which of the following prices will total revenue be maximized?

Demand is said to be price elastic if

Last year,Joan bought 50 pounds of hamburger when her household's income was $40,000.This year,her household income was only $30,000 and Joan bought 60 pounds of hamburger.All else constant,Joan's income elasticity of demand for hamburger is

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

Maddy purchases 2 pounds of beans and 3 pounds of rice per month when the price of beans is $2 per pound.She purchases 1 pounds of beans and 4 pounds of rice per month when the price of beans is $3 per pound.Maddy's cross-price elasticity of demand for beans and rice is