Exam 6: Elasticities

A price cut will increase the total revenue a firm receives if the demand for its product is:

If the supply of good A is perfectly elastic, a decrease in demand will:

If makers of snake anti-venom implement significant price increases, it is unlikely to significantly affect the use of anti-venom for treating poisonous snakebites. The demand for anti-venom is:

If good A had twice as many good substitutes as good B, but good B consumed twice the amount of a buyers income as good A, goods A and B would have the same elasticity of demand.

The government proposes a tax on flowers in order to boost its revenue. Consumers will bear no part of this tax if the:

If a huge percentage change in price leads to a small percentage change in quantity demanded, then demand is said to be inelastic.

Calculate the elasticity of demand when an increase in supply causes the equilibrium price and quantity to change from $9 and 2,000 to $7 and 3,000, respectively.

In 1991, Congress levied a 10 percent luxury tax on yachts over $100,000. The tax brought in far less than was anticipated, they must have passed the legislation thinking the demand for yachts was more ___ than it actually was.

Ceteris paribus, if a 4% increase in price leads to a 6% increase in the quantity supplied, then:

Using the midpoint method for calculating the price elasticity of demand, you get the same elasticity of demand between two points, whether you are moving up the demand curve or down it.

Good A has an income elasticity equal to 1.0 and a cross price elasticity with respect to Good B of -0.6. Then:

Price elasticity of demand is defined as:

If a small change in price will lead to an infinite change in the quantity demanded, then the demand curve is:

Bailey's Barber Shop knows that a 5% increase in the price of their haircuts results in a 15% decrease in the number of haircuts purchased. What is the elasticity of demand facing Bailey's Barber Shop?

What type of demand curve is depicted by the graph below?

Which of the following is associated with relatively elastic demand?

Ceteris paribus, if a 6% increase in price causes an 8% increase in quantity supplied, then:

Shaina and Mariah have a business that provides personal fitness training services. They know that after raising their prices from $100 to $150 per hour, the quantity of hours they spent delivering training services fell from 45 to 40 hours per week. The demand for their services is:

If the cross price elasticity of demand for tacos with respect to burritos equals +2.5, then:

If 400 apple pies are sold at $4 per pie, but 600 apple pies are sold at $3 per pie, we know: