Exam 5: Elasticities of Demand and Supply

Suppose an increase in supply lowers the price from $10 to $8 and increases the quantity demanded from 100 units to 130 units.Using the midpoint method,the elasticity of demand equals

Supply is unit elastic when the

The demand for a good is more elastic if the

Water is considered a necessity.So,is the demand for water elastic or inelastic?

If the price of corn increases by 20 percent and the quantity supplied of corn increases by 30 percent,then supply is

The price elasticity of demand measures the extent to which the quantity demanded changes when

Refer to the figure above.Suppose Starbucks charges $3.50 per cup for its latte.Which of the following is true? I.At this price,the demand for Starbucks latte is inelastic. Ii.If Starbucks raises the price of its latte,its revenue will increase. Iii.If Starbucks lowers the price of its latte,it will increase its revenue.

Suppose the demand for rescue services in our national parks is perfectly inelastic.This fact would mean that a 31 percent increase in rescue fees leads to

-The data in the table above give two points on the demand curve for pizza.Using the midpoint method,when the price of a pizza falls from $10 to $9,what is the percentage change in price?

If demand is ________,a price cut ________ the total revenue.

Of the following,which good has the most elastic demand?

Suppose the current price of barley is $7 per bushel and at that price 100,000 bushels are grown by a Colorado farmer.If the price of barley rises to $8 and quantity supplied increases to 130,000 bushels,then using the midpoint method,the price elasticity of supply for barley equals

If a 5 percent increase in income brings about a 10 percent decrease in the demand for a good,then the

If the price elasticity of demand for opera tickets in Orlando is 1.00,then the demand for opera tickets in Orlando is

-Based on data in the table above,use the midpoint method to determine the cross elasticity of demand for ice cream and cake.

The lower the level of income in a country,the

The extent to which the demand for a good changes when the price of a substitute or complement changes,other things remaining the same,is measured as the

-In the figure above,using the midpoint method,the price elasticity of demand when the price falls from $7 to $6 is equal to

Tennis balls and tennis rackets are complements.If a 3 percent change in the price of a tennis racket leads to a 9 change in the quantity of tennis balls demanded,the cross elasticity of demand equals

You are the brand manager of Crest toothpaste and you observe that when you increase the price of Crest,your total revenue increases.How is that possible?