Exam 6: Elasticity: the Responsiveness of Demand and Supply

Suppose when the price of jean-jackets increased by 10 percent,the quantity supplied increased by 16 percent.Based on this information the price elasticity of supply of jean-jackets is

If the price elasticity of demand for canned soup is estimated at -1.62.What happens to sales revenue if the price of canned soup rises?

If demand is inelastic,the absolute value of the price elasticity of demand is

An increase in the demand for green tea raises the price of green tea from $16 a pound to $20 a pound.As a result,quantity supplied increases by 30 percent.Using the midpoint formula,what is the value of the price elasticity of supply?

Suppose the cross-price elasticity of demand between grapefruit juice and orange juice is approximately 6.What does this mean?

In general,a "big ticket item" such as a house or new car will

The price elasticity of supply of hot dog buns is estimated to be 1.5.Holding everything else constant,this means that a 10 percent decrease in the price of hot dog buns will cause the quantity of hot dog buns supplied to decrease by

If the absolute value of the price elasticity of demand for DVD movies is 0.8 then the elasticity of demand of the DVD for the movie The Hangover should be

A supply curve that is vertical

Suppose the demand curve for hybrid cars shifts to the right.This will cause a relatively small increase in the price of hybrid cars if

Suppose the value of the price elasticity of supply is 4.What does this mean?

If the demand for a product is elastic,the quantity demanded changes by a smaller percentage than the percentage change in price.

Demand for a luxury item,such as a yacht,is likely to be

In recent years,the prices of new domestically produced cars have been falling.Suppose consumers respond by reducing their demand for used cars and mass transport services such as bus travel.This information suggests that the cross-price elasticity between new cars and used cars,and the cross-price elasticity between new cars and bus travel,are negative.

In order to prove that Motrin and Ibuprofen are substitutes,one should measure the ________ and get a ________.

At a price of $8 per dozen,Chuy sells 40 dozen homemade tamales per week.When he raised his price to $12 per dozen,he still sold 40 dozen per week.Based on this information,the demand for his tamales is

If the percentage increase in price is 15 percent and the value of the price elasticity of demand is -3,then quantity demanded

Which of the following goods would have the most inelastic demand?

The income elasticity of demand measures

The absolute value of the price elasticity of demand for telescopes is 1.5.Therefore,telescopes can be classified as a luxury.