Exam 5: Elasticity and Its Application

Table 5-5 -Refer to Table 5-5. As price rises from $7 to $8, the price elasticity of demand using the midpoint method is approximately

Figure 5-13 -Refer to Figure 5-13. Between point A and point B, price elasticity of demand using the midpoint method is equal to

Suppose there is a 6 percent increase in the price of good X and a resulting 6 percent decrease in the quantity of X demanded. Price elasticity of demand for X is

If we observe that when consumers' incomes rise by 10%, the quantity demanded of ice cream increases by 5%, then ice cream is an inferior good.

When a supply curve is relatively flat,

Table 5-11 -Refer to Table 5-11. Which scenario describes the market for oil in the long run?

Normal goods have negative income elasticities of demand, while inferior goods have positive income elasticities of demand.

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

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

Supply and demand both tend to be more elastic in the long run and more inelastic in the short run.

Suppose that when the price of ginger ale is $2 per bottle, firms can sell 4 million bottles. When the price of ginger ale is $3 per bottle, firms can sell 2 million bottles. Which of the following statements is true?

Table 5-2 -Refer to Table 5-2. Using the midpoint method, if the price falls from $150 to $100, the absolute value of the price elasticity of demand is

Demand is inelastic if the price elasticity of demand is greater than 1.

Suppose that when the price of wheat is $2 per bushel, farmers can sell 10 million bushels. When the price of wheat is $3 per bushel, farmers can sell 8 million bushels. Which of the following statements is true? The demand for wheat is

Suppose that 50 ice cream cones are demanded at a particular price. If the price of ice cream cones rises from that price by 4 percent, the number of ice cream cones demanded falls to 46. Using the midpoint approach to calculate the price elasticity of demand, it follows that the

The flatter the demand curve through a given point, the

Figure 5-4 -Refer to Figure 5-4. The section of the demand curve from B to C represents the

The price elasticity of demand for bread

Holding all other forces constant, if decreasing the price of a good leads to a decrease in total revenue, then the demand for the good must be

If the cross-price elasticity of two goods is positive, then the two goods are