Exam 4: Elasticity

The determinants of price elasticity of demand include:

Which pair of goods is likely to have the largest positive cross-price elasticity?

When price was 10, quantity demanded was 50. When price increased to 12, quantity demanded decreased to 40. Therefore, when price increased, total revenue

The concept of price elasticity is applied to changes in:

Suppose a decrease in price increases quantity demanded from 8 to 12. Using the mid-point formula, the percentage change in quantity demanded is:

The cross-price elasticity of two goods is 2. This tells us the two goods are:

The change in the quantity demanded of gas because of increasing gas prices over the last decade:

If two goods are substitutes, then their cross-price elasticity of demand is

Assuming price elasticity of demand is reported as an absolute value, a good with unit elastic demand has an elasticity:

In general, the more elastic a demand curve is the:

A linear demand curve:

A decrease in price causes:

If increasing the admission charge for National Parks increases the National Park Service's total revenue, then the demand for National Park visits is:

The demand for ice cream is _________________ than is the demand for frozen treats because ________________.

Demand for a good is inelastic if:

Price elasticity of supply:

If the price of a cup of coffee increases by 50 percent, the quantity demanded decreases by 50 percent. The price elasticity of demand is:

Suppose when the price of coffee beans goes from $1 to $1.20 per pound, production increases from 90 million pounds of coffee beans to 110 million pounds per year. Using the mid-point method, the percentage change in quantity supplied is:

Suppose an increase in price decreases quantity demanded from 210 to 190. Using the mid-point formula, the percentage change in quantity demanded is:

If the quantity effect outweighs the price effect of a price increase, then demand is: