Exam 5: Elasticity

Refer to the information provided in Figure 5.2 below to answer the questions that follow. Figure 5.2 -Refer to Figure 5.2. At Point C the price elasticity of demand is -1. Along line segment EC of the demand curve, the demand is

Demand is more elastic for an item for which few substitutes are available.

An increase in demand caused no change in the equilibrium price. Thus, supply must be

A firm is currently producing in the elastic portion of its demand curve. What course of action do you recommend for it assuming it wants to raise revenue?

The ABC Computer Company wants to increase the quantity of computers it sells by 5%. If the price elasticity of demand is -2.5, the company must

When the price of fresh fish increases 10%, quantity demanded decreases 5%. The price elasticity of demand for fresh fish is ________ and total revenue from fresh fish sales will ________.

If the supply of oranges is unit elastic, the price elasticity of supply of oranges is

Refer to the information provided in Figure 5.2 below to answer the questions that follow. Figure 5.2 -Refer to Figure 5.2. If the price of a hamburger is increased from $8 to $10, the price elasticity of demand equals ________. Use the midpoint formula.

For perfectly price inelastic supply,

The more time that elapses, the

A government is considering levying an alcohol tax to raise revenue to finance health care benefits. People for the tax argue that alcohol demand is price inelastic. Which of the following statements is true?

The price elasticity of demand for bottled water in Texas is -2, and the price elasticity of demand for bottled water in California is -0.5. In other words, demand in Texas is ________, and demand in California is ________.

When the price of fresh fish increases 10%, quantity demanded is unchanged. The price elasticity of demand for fresh fish is

In output markets, the elasticity of supply tends to be

At a price of $11, quantity demanded is 90; and at a price of $9, quantity demanded is 110. Since total revenue ________ by the price decrease, demand must be ________.

Refer to the information provided in Figure 5.2 below to answer the questions that follow. Figure 5.2 -Refer to Figure 5.2. If the price of a hamburger is increased from $2 to $4, the price elasticity of demand equals ________. Use the midpoint formula.

The income elasticity of demand for low-quality beef is -2. Thus, an 8% decrease in the quantity of low-quality beef demanded

At a price of $4, quantity supplied is 100; and at a price of $6, quantity supplied is 120. Using the midpoint formula, the price elasticity of supply is ________ and supply is ________.

If the elasticity of labor supply is positive, the labor-supply curve would be

The income elasticity of demand