Exam 4: Elasticity

According to the total revenue test, a price cut increases total revenue if demand is

When demand is ________, a decrease in price ________ total revenue.

The elasticity of supply measures the sensitivity of

The air route from Dallas to Mexico City is served by more than one airline. The demand for tickets from American Airlines for that route is probably

"Last October, due to an early frost, the price of a pumpkin increased by 10 percent compared to the price in the previous Halloween seasons. As a result, the quantity demanded county-wide decreased from 2 million to 1.5 million." Based on this statement, the

A 10 percent increase in income has caused a 5 percent decrease in the quantity demanded. The income elasticity is

A 10 percent decrease in income decreases the quantity demanded of pizza by 3 percent. The income elasticity of demand for pizza is

When Sam's annual income was only $15,000, he purchased 50 pounds of bananas a year. When his income rose to $18,000, he purchased 55 pounds a year. Therefore

If goods are complements, then their

Which of the following goods would have the smallest elasticity of demand?

Unit elastic demand means that the

If the price of a pumpkin rises and consumers' total expenditure on pumpkins increases, then the demand for pumpkins is inelastic.

-The increase in the demand for widgets, shown in the figure above, is the result of an increase in the price of McBoover devices. Therefore

A shift of the supply curve of oil raises the price from $60 a barrel to $75 a barrel and reduces the quantity demanded from 40 million to 20 million barrels a day. You can conclude that the

Joan's income has just risen from $940 per week to $1,060 per week. As a result, she decides to purchase 12 percent more lettuce per week. The income elasticity of Joan's demand for lettuce is

The price elasticity of demand for corn is 0.4. A new hybrid of corn is discovered and all farmers start to use it, which increases the quantity of corn they can produce from each acre. What happens to the farmers' total revenue?

The demand for computer chips is a downward sloping straight line. If there is an increase in the supply of computer chips, this change will

Which demand is more price elastic: The demand for all personal computers or the demand for Dell computers? Explain your answer.

You are the brand manager of Crest toothpaste and you observe that when you increase the price of Crest, your total revenue increases. How is that possible?

-The above figure shows the demand curve for movie rentals from Redbox. If Redbox lowered its price from $1.50 to $1.00, then total revenue would ________ because demand is ________.