Exam 5: Elasticity and Its Application

Tyler purchases 5 pounds of hot dogs per month when his monthly income is $2,000 and 4 pounds of hot dogs per month when his monthly income is $2,200. Tyler's income elasticity of demand for hot dogs is

If the price elasticity of demand for a good is 0.3, then a 20 percent decrease in price results in a

If a 40% change in price results in a 25% change in quantity supplied, then the price elasticity of supply is about

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

Cross-price elasticity of demand measures how

Suppose that quantity demand rises by 10% as a result of a 15% decrease in price. The price elasticity of demand for this good is

For which pairs of goods is the cross-price elasticity most likely to be positive?

As price elasticity of supply increases, the supply curve

If a 20% change in price results in a 15% change in quantity supplied, then the price elasticity of supply is about

Food and clothing tend to have

A perfectly elastic demand implies that

Figure 5-19 -Refer to Figure 5-19. Which of the following statements is correct?

If the demand curve is linear and downward sloping, which of the following statements is not correct?

Suppose the price elasticity of demand for a product is 1.3. If a supplier wants to increase revenue, what change should it make to price, if any?

When demand is elastic, a decrease in price will cause

If the price elasticity of supply for a window manufacturer is 1.5,

Table 5-9 -Refer to Table 5-9. Which of the three supply curves represents the least elastic supply?

Figure 5-19 -Refer to Figure 5-19. Which of the following statements is not correct?