Exam 6: Elasticity: the Responsiveness of Demand and Supply

The price elasticity of supply for umbrellas is 2.Suppose you're told that following a price increase,quantity supplied increased by 30 percent.What was the percentage change in price that brought this about?

Consider a demand curve that has a constant elasticity value of 0.What happens to quantity demanded and total revenue when price increases?

There are a limited number of original Picasso paintings.This means that the supply of original Picasso paintings is perfectly elastic.

Suppose the price elasticity of demand for methamphetamine is -0.35.If decriminalization caused the price of methamphetamine to fall by 75 percent,what will be the percentage increase in the quantity of methamphetamine demanded? If the price elasticity is -3.5,what will be the percentage increase in quantity demanded?

Suppose the demand curve for a product is represented by a typical downward-sloping curve.Now suppose the demand for this product increases.Which of the following statements accurately predicts the resulting increase in price?

Which of the following statements about the price elasticity of demand along a downward-sloping linear demand curve is true?

The cross-price elasticity of demand between an unlimited texting option and an unlimited call minutes option offered from a cell phone provider would be

The demand for gasoline in the short run is

According to a study of the price elasticities of products sold in supermarkets,the price elasticity of demand for toothpaste is estimated at -0.45.Which of the following could explain why the price elasticity of demand for toothpaste is so low?

With the increased usage of cell phone services,what has happened to the price elasticity of demand for land-line telephone services?

Studies show that the income elasticity of demand for wine is 5.03 and the income elasticity of demand for spirits is 1.21.This indicates that

The demand for most farm products is relatively inelastic.All else constant,what is the effect on farm revenues as a result of the introduction of new and better farm equipment which increases productivity?

Which of the following correctly comments on the following statement? "The only way to increase the revenue from selling a product is to increase the product's price."

A linear downward-sloping demand curve has price elasticities (in absolute values)that

Income elasticity measures how a good's quantity demanded responds to

The paradox of American farming is

Price Quantity Demanded Quantity Supplied \ 6 5,000 2,000 7 4,000 2,000 8 3,000 2,000 9 2,000 2,000 10 1,000 2,000 The town of Bloomfield is well known for its basketball team.The price of basketball game tickets is determined by market forces.Table 6-8 above shows the demand and supply schedules for basketball games tickets. -Refer to Table 6-8.What is the most distinctive feature of the supply curve?

If a firm wanted to know whether the demand for its product was elastic,unit elastic,or inelastic,then the firm could

List the five key determinants of price elasticity of demand and explain how each determinant indicates if demand tends to be elastic or inelastic.

If,for a given percentage increase in price,quantity demanded falls by a proportionately smaller percentage,then demand is