Exam 4: Demand Elasticity

A tax that is imposed as a specific amount per unit of a good is a(n)

If an item has several good substitutes,the demand curve for that item is likely to be

The cross-price elasticity of demand for coffee and tea is likely to be

If a firm decreases the price of a good and total revenue decreases,then

When purchases of tennis socks decline following an increase in the price of tennis sneakers (other things remaining equal),the relationship between these two items can be described as

The income elasticity for most staple foods,such as wheat,is known to be between zero and one. a.As incomes rise over time,what will happen to the demand for wheat? b.What will happen to the quantity of wheat purchased by consumers? c.What will happen to the percentage of their budgets that consumers spend on wheat? d.All other things equal,are farmers likely to be relatively better off or relatively worse off in periods of rising incomes?

If the consumption of sugar does not change at all following a price increase from 50 cents per pound to 65 cents per pound,the demand for sugar is considered to be

Assuming mustard and burgers are complements,a decline in the price of burgers will

Demand is given by Q_D = 6000 - 50P.Domestic supply is Q_S = 25P.Foreign producers can supply any quantity at a price of $40. a.If foreign producers can sell in the domestic market,what is the equilibrium price? What is the equilibrium quantity? How much is sold by domestic and foreign producers,respectively? b.Under domestic government pressure,foreign producers voluntarily agree to restrict their goods.What will happen to the price and quantity? What will happen to the amount that domestic producers supply? What will happen to revenues of domestic and foreign producers?

If the price elasticity of supply of a good is elastic and the good price increases,then the increase in the good's supply should be

Suppose the price of beans rises from $1.00 a pound to $2.00 a pound,quantity demanded falls from 10 units to 6 units,the coefficient of elasticity of demand for beans using the arc elasticity approach is

Unions have generally been far more successful in organizing and raising wages in skilled trades such as carpentry than in unskilled trades.Use the laws of derived demand to explain why.

Remembering that demand elasticity is defined as the percentage change in quantity divided by the percentage change in price,if price decreases and,in percentage terms,quantity rises more than price has dropped,total revenue will

Domestic demand for a good is Q_D = 3000 - 25P.The domestic supply of the good is Q_S = 20P.Foreign producers can supply any quantity at a price (P)of $30. a.What is the domestic equilibrium price and quantity? b.At this domestic equilibrium price,how much of the good will be supplied by domestic producers and how much by foreign producers?

The demand curve is: Q_D = 500 - 1/2 P. a.Calculate the (point)price elasticity of demand when price is $100.Is demand elastic or inelastic? b.Calculate the (point)price elasticity of demand when price is $700.Is demand elastic or inelastic? c.Find the point at which point elasticity is equal to -1.

The price elasticity of demand is a measure of

$\text {Table 1}$ $\text {The following information is provided for Tony Romo's income and expenditures.}$ \ 2,000 2 8 \ 3,000 4 6 -In Table 1,pizzas are classified as a(n)

The government unit that wants to achieve "revenue enhancement" will find it considerably more favorable to enact an excise tax on goods whose demand is

If the demand for a product is said to be relatively inelastic,the "absolute" value of the elasticity coefficient will be

Suppose the price of beans rises from $1.00 a pound to $2.00 a pound,quantity demanded falls from 10 units to 6 units.In this example,the demand for beans is said to be