Exam 6: Elasticity

Use the following to answer questions : Figure: The Demand for eBooks -(Figure: The Demand for e-Books)If the price of e-Books decreases from $6 to $4,total revenue _____,which means that demand is _____.

If the estimated price elasticity of demand for foreign travel is 4:

The price elasticity of demand for gasoline in the short run has been estimated to be 0.1.If a war in the Middle East causes the price of oil (from which gasoline is made)to increase,how will that affect total expenditures on gasoline in the short run,all other things equal?

Use the following to answer questions : Figure: The Market for Lattes -(Figure: The Market for Lattes)Use Figure: The Market for Lattes.What is the price elasticity of demand between $2 and $2.50 per cup,using the midpoint formula?

The price of gasoline rises 5%,and the quantity of gasoline purchased falls 1%.The price elasticity of demand is equal to _____,and demand is described as _____.

If you wanted to make sure that your calculation of elasticity between two points was the same,regardless of your initial point,you would use:

Sarah has been told that she has only 1 week to finish some pottery for a show.Sarah has exhausted her supply of clay,and new clay is absolutely necessary for finishing her products.For Sarah,the price elasticity of demand for new clay right now is elastic.

Use the following to answer questions : Figure: The Demand for eBooks -(Figure: The Demand for e-Books)Use Figure: The Demand for e-Books.What is the price elasticity of demand (by the midpoint method)when the price increases from $6 to $8?

Use the following to answer questions : Figure: The Demand Curve -(Figure: The Demand Curve)Use Figure: The Demand Curve.Between prices $4 and $5,demand is _____,and total revenue will _____ if price increases.

Decreases in input costs and a longer time since a price change will tend to:

The price elasticity of demand for cabbage in Southern Ontario has been estimated to be 0.25.If an insect infestation destroys 20% of the region's cabbage crop (and thus reduces supply),how will that affect total expenditures on cabbage,all other things equal?

Use the following to answer questions : Figure: The Demand Curve -(Figure: The Demand Curve)Use Figure: The Demand Curve.If the price is $3,total revenue is _____.If the price is $4,total revenue is _____.

If the price of a good increases by 20% and the quantity demanded changes by 15%,then the price elasticity of demand is equal to:

Local cable companies recently increased the price of basic services.A news expert reporting on the increase stated,"While prices have increased 40%,the cable company reports only a 20% increase in revenue." This remark suggests that the demand for basic cable service is elastic.

Goods A and B have a positive cross-price elasticity of demand.This means that goods A and B are:

The price elasticity of demand for milk has been estimated to be somewhere between 0.49 and 0.63.If a new system of feeding and milking cows yields a 15% increase in the production of milk throughout the country,how will that affect total expenditures on milk,all other things equal?

The price elasticity of demand is the ratio of the percent change in quantity demanded to the percent change in price as one moves along the demand curve.

The price elasticity of demand for soft drinks has been estimated to be 0.55.If the government enacts a major increase in the tax on imported sugar (a major ingredient in soft drink manufacturing),how will that affect total expenditures on soft drinks,all other things equal?

The income elasticity of demand for an inferior good,such as a macaroni and cheese dinner,is negative.

If an increase in the price of a good leads to an increase in total revenue,the _____ curve is price _____.