Exam 5: Elasticity of Demand and Supply

Cross-price elasticity of demand measures

A 5 percent increase in income leads to a 10 percent decrease in quantity demanded for a service. This service is a(n) __________ good and demand is __________.

The supply of paintings by Van Gogh is most likely to be

Price elasticity of demand is useful because it measures __________ responsiveness to changes in __________.

If an increase in price from $1.20 to $2 per unit leads to an increase in quantity supplied from 20 to 100 units,

Along a linear demand curve, as the price rises, demand becomes more

A successful advertising campaign would likely

Suppose the price elasticity of demand for your economics textbook is -1. If the publisher raises the price by 5 percent,

Negative cross-price elasticity of demand indicates that

A good synonym for elasticity would be

The percentage change in the demand for film divided by the percentage change in the price of cameras indicates

NARRBEGIN: Exhibit 5-12 Exhibit 5-12 -Refer to Exhibit 5-12. What can be said of the price elasticity of demand for this good?

In order to prove that Coca Cola and 7-Up are substitutes, one should test the __________ and get a __________.

A perfectly elastic demand curve is

If supply is perfectly elastic, the supply curve is

If the price of Pepsi-Cola increases from 50 cents to 60 cents per can and the quantity demanded decreases from 100 cans to 50 cans, then the Pepsi-Cola Company could increase its total revenue by

If an increase in the price of peanut butter causes a decline in the demand for jelly, then

NARRBEGIN: Exhibit 5-1 Exhibit 5-1 -Use the information in Exhibit 5-1 to calculate the value of price elasticity of demand for Good B.

For which of the following goods is the value of income elasticity most likely to be negative?

If a $1 increase in price leads to a 3-unit decrease in quantity demanded, then demand must be elastic.