Exam 6: Elasticity: the Responsiveness of Demand and Supply

At a price of $100,Beachside Canoe Rentals rented 11 canoes.When it increased its rental price to $125,9 canoes were rented.Calculate the absolute value of the price elasticity of demand for canoe rentals using the midpoint formula.

-Refer to Figure 6-12.The diagram shows two supply curves,SA and SB.As price rises from P0 to P1,which supply curve is more elastic?

The most important determinant of the price elasticity of demand for a good is

Figure 6-1 -Refer to Figure 6-1.The demand curve on which elasticity changes at every point is given in

Table 6-1 Price Quantity \ 35 40 25 50 -Refer to Table 6-1.Suppose you own a bookstore.You believe that you can sell 40 copies per day of the latest John Grisham novel when the price is $35.You consider lowering the price to $25 and believe this will increase the quantity sold to 50 books per day.Compute the price elasticity of demand using the midpoint formula and these data.Select the correct implication from your work.

Between 1950 and 2015,the number of acres devoted to wheat production in the United States ________ and the price of wheat ________.

Since 1950,there has been a substantial increase in wheat production.The increase in production has led to a decrease in the price of wheat because of which of the following factors?

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 numerical value of the price elasticity of supply?

If the market for a product is narrowly defined,then there are likely to be many substitutes for the product and the demand for the product is relatively elastic.

Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09.This means that

Figure 6-10 -Refer to Figure 6-10.A perfectly elastic supply curve is shown in

Inelastic supply occurs whenever the elasticity of supply value is

Suppose the value of the price elasticity of demand is -3.What does this mean?

Consider the following pairs of items: a.shampoo and conditioner B.iPhones and earbuds C.a laptop computer and a desktop computer D.beef and pork E.air-travel and weed killer Which of the pairs listed will have cross-price elasticity of zero?

The estimated price elasticities of demand for the products listed in the table as "Product A" are from Table 6-2 in the text.Indicate whether the products listed as "Product B" will have a more elastic or less elastic demand than the corresponding Product A. Is Estimated Elasticity for Estimated Product B More Elastic or Elasticity for Less Elastic than for Product A Product A Product B Product A ? Samuel Adams Beer -0.29 Boston Lager Organically Chicken -0.37 raised chicken Illegal Cocaine -0.28 narcotics Marlboro Cigarettes -0.25 Lights Restaurant Denny's Grand meals -0.67 Slam breakfast

The larger the share of a good in a consumer's budget,holding everything else constant,the

To calculate the price elasticity of supply,we divide

When demand is elastic,a fall in price causes total revenue to rise because

Briefly explain the economic concept of elasticity.

Suppose the absolute value of the price elasticity of demand for meals at Fortune Buffet House is ∞.What happens to sales revenue if the restaurant increases its price by 5 percent?