Exam 5: Elasticity of Demand and Supply

If income rises and the demand for toothbrushes stays the same, income elasticity of toothbrushes is said to be unit elastic.

If price increases from $45 to $55, the market quantity supplied increases from 20 units per week to 30 units per week. The price elasticity of supply is

Wheat farmers in Kansas would benefit from a devastating crop failure in North Dakota (another major wheat-producing state) if the U.S. demand for wheat is

Demand is inelastic if

If a price reduction leads to larger total revenue, demand is

NARRBEGIN: Exhibit 5-3 Exhibit 5-3 -Use the information in Exhibit 5-3 to calculate the value of price elasticity of demand for restaurant meals.

All of the following are examples of a constant-elasticity demand curve except a(n)

All other things constant, goods will have more __________ demand if their price uses up a __________ proportion of a consumer's budget.

Both income elasticity of demand and cross-price elasticity of demand coefficients can take on negative, zero, or positive values.

If Joe says that nothing comes close to a Pepsi, his demand for Pepsi is likely to be

As DVDs become popular substitutes for video cassettes, demand for video cassettes is likely to

The total revenue from selling trucks is equal to

Price elasticity of demand is defined as

For which of the following is demand likely to be most price-elastic?

If the sellers in the cigarette industry formed a cartel and decided to set price along a straight-line downward-sloping demand curve, which point would they choose if they wanted to gain the highest total revenue?

If the price of a good doubles and quantity supplied triples, then

Perfectly elastic demand curves are

Another word for elasticity is

If a firm raises the price of its product, its total revenue will

NARRBEGIN: Exhibit 5-2-1 Exhibit 5-2 -Use the information in Exhibit 5-2 to calculate the value of price elasticity of demand.