Exam 5: Elasticity and Its Application

If the income elasticity of demand for a good is -1.40, is the good a normal or inferior good?

Table 5-7 The following table shows a portion of the demand schedule for a particular good at various levels of income. -Refer to Table 5-7. Using the midpoint method, at a price of $8, what is the income elasticity of demand when income rises from $7,500 to $10,000?

Figure 5-3 -Refer to Figure 5-3. Which demand curve is perfectly elastic?

Figure 5-6 -Refer to Figure 5-6. For prices below $8, demand is price

The demand for grape-flavored Hubba Bubba bubble gum is likely

Figure 5-21 -Refer to Figure 5-21. Using the midpoint method, what is the price elasticity of supply between $25 and $35?

Which of the following statements is correct?

Table 5-10 -Refer to Table 5-10. Using the midpoint method, which of the three supply curves has the most inelastic price elasticity of supply?

In the long run, the quantity supplied of most goods

Holding all other factors constant and using the midpoint method, if a candy manufacturer increases production by 20 percent when the market price of candy increases from $0.50 to $0.60, then supply is

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

At price of $1.20, a local pencil manufacturer is willing to supply 150 boxes per day. At a price of $1.40, the manufacturer is willing to supply 170 boxes per day. Using the midpoint method, the price elasticity of supply is about

Scenario 5-1 Suppose that when the average college student's income is $10,000 per year, the annual quantity demanded of Patty's Pizza is 50 and the annual quantity demanded of Sue's Subs is 80. Suppose that when the price of Patty's Pizza increases from $8 to $10 per pie, the quantity demanded of Sue's Subs increases from 80 to 100. Suppose also that when the average student's income increases to $12,000 per year, the annual quantity demanded of Patty's Pizza increases from 50 to 60. -Refer to Scenario 5-1. What can you deduce about the type of good Patty's Pizza is and about the relationship between Patty's Pizza and Sue's Subs?

Table 5-13 Consider the following demand schedule. -Refer to Table 5-13. Using the midpoint method, what is the price elasticity of demand between $12 and $15?

Figure 5-11 -Refer to Figure 5-11. If price increases from $10 to $20, total revenue will

If the price of gasoline rises, when is the price elasticity of demand likely to be the highest?

Suppose the cross-price elasticity of demand between hot dogs and mustard is -2.00. This implies that a 20 percent increase in the price of hot dogs will cause the quantity of mustard purchased to

As the price elasticity of supply approaches infinity, very small changes in price lead to

Figure 5-8 -Refer to Figure 5-8. An increase in price from $15 to $20 would

If the price elasticity of supply is 1.2, and price increased by 5%, quantity supplied would