Exam 5: Elasticity and Its Application

For a particular good, an 8 percent increase in price causes a 4 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?

In January the price of dark chocolate candy bars was $2.00, and Willy's Chocolate Factory produced 80 pounds. In February the price of dark chocolate candy bars was $2.50, and Willy's produced 110 pounds. In March the price of dark chocolate candy bars was $3.00, and Willy's produced 140 pounds. The price elasticity of supply of Willy's dark chocolate candy bars was about

A good will have a more elastic demand, the

If demand is price inelastic, then when price rises, total revenue

The cross-price elasticity of garlic salt and onion salt is -2, which indicates that garlic salt and onion salt are substitutes.

If we observe that when the price of chocolate increases by 10%, quantity demanded falls by 5%, then the demand for chocolate is price inelastic.

Which of the following should be held constant when calculating an income elasticity of demand?

Refer to Table 5-6. Using the midpoint method, demand is unit elastic when quantity demanded changes from

Suppose that an increase in the price of melons from $1.30 to $1.80 per pound increases the quantity of melons that melon farmers produce from 1.2 million pounds to 1.6 million pounds. Using the midpoint method, what is the approximate value of the price elasticity of supply?

Which of the following is likely to have the most price inelastic demand?

Refer to Figure 5-5. At a price of $50 per unit, sellers' total revenue equals

For a good that is a necessity,

For a particular good, a 12 percent increase in price causes a 3 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?

When the price of a bracelet was $28 each, the jewelry shop sold 128 per month. When it raised the price to $32 each, it sold 112 per month. Using the midpoint method, the price elasticity of demand for bracelets is

When quantity moves proportionately the same amount as price, demand is

Suppose that 300 bottles of soda are demanded at a particular price. If the price of a bottle of soda rises from that price by 6 percent, the number of bottles of soda demanded falls to 275. Using the midpoint approach to calculate the price elasticity of demand, it follows that the

Jerome says that he will spend exactly $25 each month on new apps for his mobile device, regardless of the price of apps. Jerome's demand for apps is

Which of the following is likely to have the most price elastic demand?

If a supply curve is perfectly vertical, what is the value of the price elasticity of supply?

Figure 5-14 -Refer to Figure 5-14. Over which range is the supply curve in this figure the least elastic?