Exam 5: Price Elasticity of Demand and Supply

If the quantity of concert tickets sold decreases by 10 percent when the price increases by 5 percent, this market is operating in which section of its downward-sloping straight-line demand curve?

Suppose that the quantity of apples sold increases by 30 percent after the price of pears increases by 15 percent. What is the coefficient of cross elasticity of demand?

Consider the market for bicycles. If a dealer cuts prices by 10 percent and sells 20 percent more bikes, then demand for bicycles is:

To determine whether two goods are substitutes or complements, an economist would estimate the:

On a part of the demand curve where the price elasticity of demand is less than 1, a decrease in price:

A perfectly elastic demand curve has a price elasticity of demand coefficient of:

Suppose the president of a college argues that a 25 percent tuition increase will raise revenues for the college. It can be concluded that the president thinks that demand to attend this college is:

If the percentage change in the quantity demanded of a good is greater than the percentage change in price, price elasticity of demand is:

If the price elasticity of supply equals zero, this implies that:

Suppose there is no change in total revenue when the price changes. The demand curve for this good is:

Two goods are complementary if:

As cities prospered and per-capita incomes increased, the demand for bus travel diminished. This suggests that:

When the price of Good X increases by 10 percent, the quantity demanded of Good Y increases by 25 percent. The cross elasticity between these two goods is

Sally recently got a 15 percent raise. She now purchases 7.5 percent more steak dinners. Sally's income elasticity for steak dinners is:

For which of the following goods are consumers likely to have the most elastic demand?

Suppose the Good Food supermarket increases the price of a pound of bananas from $.75 to $1.25 and finds that the quantity of bananas it sells per month drops from 1,500 to 1,000. The price elasticity of demand coefficient for bananas in this price range is:

If the price elasticity of demand coefficient equals 2 then:

The income elasticity of demand for shoes is estimated to be 1.50. We can conclude that shoes:

The sign of the price elasticity coefficient for a normal good will:

Other things constant, the price elasticity of demand for a product will be smaller (more inelastic) if: