Exam 5: Elasticities of Demand and Supply

-The table above gives the demand schedule for museum visits. a.You,as the resident economist,have been given the task of maximizing the museum's total revenue.What admission price should you charge? b.What is the elasticity of demand between $6 and $4? c.Moving along the demand schedule from $10 to $8 to $6 and ultimately to $4,how does the price elasticity of demand change in size?

Suppose Starbucks currently charges $2.50 per cup for its latte.If Starbucks raises the price to $3.00 per cup,based on the demand curve in the figure above,its total revenue will ________ because the demand for Starbucks latte is ________ over this price range.

Suppose the San Francisco 49ers lower ticket prices by 15 percent and as a result the quantity of tickets demanded increases by 10 percent.This set of results shows that San Francisco 49ers tickets have

Which of the following is true? i.The demand for a good is elastic if when its price changes,the percentage change in the quantity demanded exceeds the percentage change in price. ii.Price elasticity of demand equals the percentage change in price divided by the percentage change in the quantity demanded. iii.If demand is price inelastic,a rise in price leads to a decrease in total revenue.

If Microsoft wanted to prove to the Justice Department that its Windows software has many substitutes that personal computer owners can use,Microsoft hopes to find

Jess owns a sandwich shop.The price of a sandwich recently increased from $5 to $7.Jess responded by increasing the quantity of sandwiches she supplied from 70 to 90 per day.Using the midpoint method,Jess's price elasticity of supply is equal to

When the price of Ford pickup trucks rises from $18,000 to $19,000,the quantity of Chevy trucks demanded increases from 112,000 to 144,000.What does the cross elasticity of demand between Ford and Chevy trucks equal?

If a 2 percent change in price leads to a ________ percent change in the quantity demanded,then demand is ________.

What are the three cases for the price elasticity of demand? Briefly define each.

Assume that it is predicted that for the years after you graduate from college,the entire economy will experience a long period of prosperity when incomes grow rapidly.What type of industry would be the best for you to find employment if this prediction is correct? An industry that produces a product that is

If a 4 percent change in the price of a good leads to a 3 percent change in quantity demanded,the price elasticity of demand equals

The price elasticity of supply is always a positive value because i.there is a direct relationship between the price and the quantity supplied. ii.as the equilibrium price increases,the equilibrium quantity also always increases. iii.buyers are willing to pay a higher price for larger quantities.

The income elasticity of demand for movies in the United States is 3.41.If people's incomes decrease by 1 percent,what is the decrease in the quantity of movies demanded?

Suppose the local university charges $85 per credit hour.If tuition increases from $85 to $93 per credit hour,using the midpoint method,what is the percentage change in price?

To determine the price elasticity of demand,we

If we are trying to determine if two different products are substitutes,complements,or not related at all,we should find the value of the

If a lower price for good X increases the demand for good Y,the cross elasticity value for the two goods is

-In the figure above,using the midpoint method,what is the price elasticity of demand between points A and B?

Goods that can be produced at a constant or very gently rising opportunity cost have

When the price of a pizza is $10,the quantity of soda demanded is 300 drinks.When the price of a pizza is $15,the quantity soda demanded is 100 drinks.The cross elasticity of demand is equal to