Cengage 5 quiz

If consumers always spend 15 percent of their income on clothing, then the income elasticity of demand for clothing is_____

b. 1.00

A decrease in supply (shift to the left) will increase total revenue in that market if_____

b. demand is price inelastic

If supply is price inelastic, the value of the price elasticity of supply must be_____

b. less than 1

The demand for which of the following is likely to be the most price inelastic?

a. Transportation

If the cross-price elasticity between two goods is negative, the two goods are likely to be________

a. complements

If demand is linear ( a straight line), then price elasticity of demand is_______

a. elastic in the upper portion and inelastic in the lower portion

If a small percentage increases in the price of a good greatly reduces the quantity demanded for that good, the demand for that good is_______

a. price elastic

In general, a flatter demand curve is more likely to be_______

a. price elastic

If a supply curve for a good is price elastic, then______

a. the quantity supplied is sensitive to changes in the price of that good

If a farmer must sell all of their daily harvest of vegetables before they spoil for whatever price they are offered, once the vegetables are picked, the farmer's price elasticity of supply for fresh vegetables is_____

a. zero

Suppose that at a price of $30 per month, there are 30,000 subscribers to Small Town Streaming Service. If Small Town Streaming Service raises its price to $40 per month, the number of subscribers will fall to 20,000

b. $30 per month

If there is excess capacity in a production facility, it is likely that the firm's supply curve is______

b. price elastic

In general, a steeper supply curve is more likely to be_______

b. price inelastic

If the income elasticity of demand for a good is negative, it must be a (n)______

b.. inferior good

Technological improvements in agriculture that shift the supply of the agricultural commodities to the right tend to_____

c. reduce the total revenue to farmers as a whole because the demand for food is inelastic

The price elasticity of demand is defined as_____

c. the percentage change in quantity demand of a good divided by the percentage change in the price of that good

If an increase in the price of a good has no impact on the total revenue in that market, demand must be______.

c. unit price elastic

Suppose that at a price of $30 per month, there are 30,000 subscribers to Small Town Streaming Service. If Small Town Streaming Service raises its price to $40 per month, the number of subscribers will fall to 20,000. Using the midpoint method for calculating the elasticity, what is the price elasticity of demand for this company's streaming service?

d. 1.4

Which of the following would cause a demand curve for a good to be price inelastic?

d. The good is necessity

If consumers think that there are very few substitutes for a good, then_______

d. demand would tend to be price inelastic