Exam 4: Elasticity: Demand and Supply

If 12 candy bars are demanded at $0.30 each and 4 candy bars are demanded at $0.50 each, what is the elasticity of demand over the price range from $0.30 to $0.50?

If the price elasticity of demand is greater than 1, then demand is inelastic.

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?

Supply tends to be more elastic in the long run than in the short run.

If the price of chocolate increases by 15 percent and the quantity demanded of chocolate declines by 5 percent, the price elasticity of demand ( )is 3.

The less responsive consumers are to a change in the price of a product:

Scenario 5.1 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 price elasticity of demand for noodles is _____.

Which of the following would most likely be highly price-elastic?

Income elasticity of demand is expected to be _____.

If demand is perfectly inelastic, then:

Which of the following is a determinant of price elasticity of demand?

Suppose the manager of a store wants to know whether the product of the store across the street is a substitute for her product.In other words, she would need to know if the cross-price elasticity of demand for the products _____.

Ceteris paribus, if a 20 percent increase in the price of shoes leads to a 10 percent increase in the quantity supplied of shoes, then the price elasticity of supply is equal to _____.

Which of the following situations is represented by a nearly horizontal supply curve?

Price elasticity of demand is a measure of the:

If a 10 percent increase in the price of tomatoes leads to a 20 percent decrease in quantity demanded, then the price elasticity of demand for tomatoes, , equals 2.

Assume that as the price of wheat falls from $10 to $8, the quantity demanded of wheat increases from 100 bushels to 150 bushels.This implies the price elasticity of demand for wheat is 0.5.

Price elasticity of demand is more likely to be greater than one if:

A measure of the responsiveness of quantity supplied to changes in price is known as _____.

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