Exam 33: Elasticity: Demand and Supply

The actual or chronological time for the short and the long run does not vary from industry to industry.

An economic survey observed that, a 20 percent cut in the price of a certain line of women's clothing, almost doubled the quantity demanded of the clothing.This led economists to conclude that the demand for this line of clothing is _____.

If the quantity demanded of product S increases as the price of product T decreases, then S and T are complements.

Demand is price-elastic at the top portion of a straight-line downward-sloping demand curve.

If firms have to change their production techniques in order to change the quantities they supply, they can respond less in a year to a price change than they could in a month.

Assume that due to unfavorable conditions in a prime honey-producing area, the price of honey increases by 50 percent.The quantity consumed of herbal tea declines immediately by 25 percent.Everything else held constant, the:

If the demand for cream cheese produced by a dairy is perfectly elastic, then what will be the shape of the demand curve faced by the dairy?

There are some special types of goods for which supply cannot change irrespective of the length of time allowed for change, such as Beethoven symphonies.The price elasticity of supply for these goods is _____.

If a product has an elastic demand, it means that consumers are relatively insensitive to a change in the price of the product.

The cross-price elasticity between movie tickets and video rentals is positive.

Last year, Alice bought 40 CDs when her income was $20, 000.This year, her income increased to $25, 000, and she purchased 48 CDs.We can conclude that:

An inferior good or service is any good or service for which an increase in income causes a decrease in demand.

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x.Assume that P = $8, I = 200, and P_x = $10. Given the above equation, the quantity of noodles demanded at a price of $8 is _____.

In the opinion of many consumers, there are few, if any, substitutes for the popular search engine Google.If Google were to charge consumers for its services, it would face:

Assume that the demand curve for a certain good is a vertical line.This vertical demand curve illustrates the idea that:

When product A is a good substitute for product B, the cross-price elasticity of demand for products A and B will be _____.

Which of the following is true of price elasticity of demand?

Tax incidence explains how taxes are shared between producers and consumers.

If butter has an income elasticity equal to 0.75, then butter is an inferior good.

A perfectly inelastic demand curve is represented by an upward rising straight line.