Exam 6: Describing Supply and Demand: Elasticities

An economist estimates that with every 15 percent increase in income, the quantity of turkey purchased declines by 1.8 percent. From this information one would conclude that turkey is:

Inelastic demand creates an incentive for suppliers to:

The short-run elasticity of demand for gasoline sold at gasoline stations is 0.20. If terrorism causes the supply of gasoline to fall, resulting in a 5 percent drop in quantity, and other things remain the same, the price per gallon will increase by:

Refer to the graph shown. Which supply curve is elastic?

If the quantity of houses supplied in an area increases 10 percent when the price goes up 25 percent, the supply:

When demand is perfectly inelastic, there is no change in quantity demanded after a change in price.

In Massachusetts, the price elasticity of license plates is 3.5 and their price is $50. Massachusetts is:

Refer to the graph shown. Which supply curve is unit elastic?

If quantity demanded changes infinitely when the price changes, the demand:

Supply is said to be inelastic when the:

An economist estimates the elasticity of demand for baseball tickets to be 0.23. Using this information, a club that wants to raise revenues should:

Refer to the graph shown. Which supply curve is inelastic?

If the price elasticity of demand for a good is inelastic, a price change causes:

It has been estimated that the price elasticity of demand for attending baseball games is 0.23. Other things held constant, a 10 percent increase in attendance can be explained by a:

The supply curve with the greatest elasticity is one with slope of:

If supply is highly elastic and demand shifts to the left:

If the elasticity of demand for electricity is 0.13, the demand for electricity is:

The Honolulu tourism commission proposed a 6 percent tax on hotel rooms to pay for an outdoor amphitheater. A Purdue University economist estimates that the tax would result in a 6 percent increase in the price of hotel rooms. If the elasticity of demand is 1.33, what is the expected change in quantity demanded?

Refer to the graph shown. Calculate the approximate elasticity of demand for the line segment BD:

A supply curve that intersects the horizontal (quantity) axis is: