Exam 6: Elasticity: The Responsiveness of Demand and Supply

Holding everything else constant,the absolute value of the price elasticity of demand for Saucony tennis shoes is ________ the price elasticity of demand for tennis shoes.

Figure 6-2 -Refer to Figure 6-2.The absolute value of the price elasticity of demand at points a and b is 1.What is the value of P_b?

In September 2012,the average price of gasoline in the United States was $3.91 per gallon,and consumers purchased nearly 5 percent less gasoline than they had during September 2011,when the average price of gasoline was $3.66 per gallon.Based on these figures,from September 2011 to September 2012,the demand for gasoline was

If the price elasticity of demand is unit-elastic,a 10 percent increase in price will result in a 10 percent increase in revenue.

The price elasticity of demand for Stork ice cream is -4.Suppose you're told that following a price increase,quantity demanded fell by 10 percent.What was the percentage change in price that brought about this change in quantity demanded?

For consumers who opt to pay a $10 monthly fee to have unlimited texting on their cell phones,but choose not to pay a $5 monthly fee to have unlimited call minutes,the unlimited texting option has a ________ than the unlimited minutes option.

Figure 6-4 -Refer to Figure 6-4.Which of the following statements is true about the price elasticity of demand?

The price elasticity of an upward-sloping supply curve is always

Holding everything else constant,the demand for a good tends to be more elastic

Table 6-4 The publisher of a magazine gives his staff the following information: He tells the staff, "Our costs are currently $150,000 more than our revenues each month. I propose to eliminate this problem by raising the price of the magazine to $3.00 per issue. This will result in our revenue being exactly equal to our cost." -Refer to Table 6-4.Which of the following statements is correct?

If the market for a product is broadly defined,then

Table 6-2 -Refer to Table 6-2.Assume that an economist has estimated the price elasticity of demand values in the table above.Use the data in the table to select the correct statement.

Price elasticity of demand measures

According to a study of the price elasticities of products sold in supermarkets,the price elasticity of demand for toothpaste is estimated at -0.45.Which of the following could explain why the price elasticity of demand for toothpaste is so low?

Table 6-6 -Refer to Table 6-6. a.Using the information in the table,calculate the income elasticity of demand for good X and characterize the good.Use the midpoint formula. b.Can you calculate the income elasticity of demand for good Y? If you can,show your calculation and characterize the good.If you cannot,explain why.

Suppose the supply of bicycles is price elastic.This means that

Table 6-7 The town of Bloomfield is well known for its basketball team. The price of basketball game tickets is determined by market forces. Table 6-7 above shows the demand and supply schedules for basketball games tickets. -Refer to Table 6-7.What is the most distinctive feature of the supply curve?

If tolls on a toll road can be raised significantly before commuters will consider using a free alternative,then an increase in tolls will result in

From 1950 to 2013 the number of people who lived on farms fell from 23 million to fewer than 3 million? Which of the following factors have contributed to this trend?

Studies show that the income elasticity of demand for wine is approximately five.What does this mean?