Exam 6: Elasticity: the Responsiveness of Demand and Supply

If,when price changes by 35 percent,the quantity demanded changes by 7 percent,then the absolute value of the price elasticity of demand is 5.

Cross-price elasticity of demand is calculated as the

Figure 6-10 -Refer to Figure 6-10.A perfectly inelastic supply curve is shown in

When demand is unit elastic,a change in price causes total revenue to stay the same because

Barbara,the consummate hostess,proudly announced as she served dessert,"A port is often the perfect end to a meal,sipped with a piece of my scrumptious chocolate cake." Evidently,Barbara views port and chocolate cake as

If the market for a product is broadly defined,then

A service station owner in Staten Island,New York,was worried that raising the price of gasoline would cause the quantity demanded to fall by so much that he would be in a worse situation than if he did not raise the price.If raising the price of gasoline would cause the owner to receive less total revenue from the sale of gasoline,the demand for gasoline is

Jonah lives in a small town where there is only one Mexican restaurant.Which of the following is likely to be true about the price elasticity of demand for meals at the Mexican restaurant?

The demand for all carbonated beverages as a whole is likely to be ________ the demand for Dr.Pepper.

If,for a given percentage decrease in price,quantity supplied decreases by a proportionately smaller percentage,then supply is

Shifts in the supply of oil have caused large changes in price since the 1970s because

If a firm's goal is to maximize revenue,it will price its product to correspond to the unit-elastic segment of its demand curve.

If 50 units are sold at a price of $20 and 80 units are sold at a price of $15,what is the absolute value of the price elasticity of demand? Use the midpoint formula.

If a firm lowered the price of the product it sells and found that total revenue did not change,then the demand for its product is

Suppose the price of gasoline in July 2004 averaged $1.35 a gallon and 15 million gallons a day were sold.In October 2004,the price averaged $2.15 a gallon and 14 million gallons were sold.If the demand for gasoline did not shift between these two months,use the midpoint formula to calculate the price elasticity of demand.Indicate whether demand was elastic or inelastic.

The price elasticity of demand is equal to

If the slope of a demand curve is equal to -0.1 then

In the alcohol industry,both wine and spirits are considered to be substitutes for beer.

If,for a given percentage increase in price,quantity supplied increases by a proportionately larger percentage,then supply is

Economists estimated that the cross-price elasticity of demand for beer and wine is -0.83 and the income elasticity of wine is 5.03.This means that