Exam 5: Price Elasticity of Demand and Supply

If the quantity of bread demanded rises 2 percent when the price of bread declines 10 percent, then the price elasticity of demand is:

If the short-run price elasticity of demand for hospital care is .27, then the long-run price elasticity is expected to be:

What happens to total revenue if price increases and demand is inelastic? Why?

Which statement about price elasticity of demand along a linear demand curve is true ?

Suppose a good has a downward-sloping, straight-line demand curve. If the price elasticity of demand is 2.5 when the price is $10 per unit, then the price elasticity of demand when the price is $7 per unit could be

Suppose that Starbucks reduces the price of its premium coffee from $2.20 to $1.80 per cup, and as a result, the quantity sold per day increased from 350 to 450. Over this price range, the price elasticity of demand for Starbucks coffee is:

The cross elasticity between two goods, X and Y, is positive. From this, we can conclude that goods X and Y are:

A local doughnut shop reduced the price of its doughnuts from $4 per dozen to $3.50 per dozen, and as a result, the daily sales increased from 300 to 400 dozen. This indicates that the price elasticity of demand for the doughnuts was:

If the quantity of bananas sold increases by 5 percent when the price decreases by 10 percent, the price change occurs in the

Which of the following pairs is most likely to represent complementary goods?

A 10 percent rise in the price of housing reduces the quantity demanded of housing by 3 percent. We can conclude that the demand for housing is:

Using the midpoints formula, what would be price elasticity of demand for a gallbladder operation if the number of operations fell from 6,000 to 4,000 per week after its price increased from $6,000 to $10,000?

An increase in total revenue results occurs from which of the following?

When a 2 percent increase in price generates a greater than 2 percent decrease in quantity demanded, then:

Exhibit 5-7 Demand curve for concert tickets ​ According to Exhibit 5-7, the demand for concert tickets between the prices of $10 and $40 is:

The short-run price elasticity of demand for airline travel is 0.05, while the long-run elasticity is 2.36. This means that a significant increase in airline ticket prices will cause airline companies to:

Assume 300 billion pounds of Ostrich meat is produced per year when the price is 50 cents per pound, and 500 billion pounds when the price is 60 cents per pound. The supply of Ostrich meat, other factors held constant, is:

The demand for a product is likely to be more elastic:

There are three goods you are interested in purchasing, X, Y and Z. You notice that the price of Z has fallen. Given that the cross price elasticity between Z and Y is − 1.5; the cross price elasticity between Y and X is 3.0, and the cross price elasticity between Z and X is 0.50. It would make sense that:

If the government wants to raise tax revenue and shift most of the tax burden to the consumers, it would impose a tax on a good with a: