ch 3

The mathematical formula for price elasticity of demand is ______.

(percentage change in quantity demanded)/(percentage change in price)

Which point on the graph is the most elastic?

A

The price elasticity of demand__________Unavailable is the responsiveness of quantity demanded to a change in price, whereas the price elasticity of quality___________ Unavailable is the responsiveness of quantity supply to a change in price.

Blank 1: demand Blank 2: supply

The price elasticity of demand is the responsiveness of quantity demand __________ Unavailable to a change in price, whereas the price elasticity of supply is the responsiveness of quantity supply -___________Unavailable to a change in price.

Blank 1: demanded Blank 2: supplied

When the demand for a good is elastic, the percentage change in quantity is less ______ Unavailable (less/greater) than the percentage change in price.

Blank 1: greater, more, larger, or bigger

_____ is the difference between the value to consumers and the amount they pay to producers. Multiple choice question.

Consumer surplus

PIC

D1 D2 D3 D4

______ is measure of responsiveness of quantity to a change in another variable.

Elasticity

Which of the following goods have inelastic demand?

Health care services Consumer electricity (in the short run) Eggs

Which type of elasticity measures how changes in income impact quantity demanded?

Income elasticity of demand

Which of the following goods/services are likely to have perfectly inelastic demand (at realistic prices)? (Select all that apply.)

Insulin to a diabetic The services to set a broken leg

When the demand for a good is inelastic, the percentage change in quantity is ________ (less/greater) than the percentage change in price.

Less

Provide the letters that are the boundary of the area which represents the money consumers pay producers.

OP*CQ*

Which of the following goods have unit elastic demand (or close to it)?

Shellfish Cars (non-luxury)

Which of the following goods/services are likely to have perfectly inelastic demand (at realistic prices)? (Select all that apply.)

The services to set a broken leg Insulin to a diabetic

The price elasticity of demand measures the responsiveness of ______ to a change in price whereas the price elasticity of supply measures the responsiveness of ______ to a change in price.

consumers; producers

Which type of elasticity measures how changes in the price of one good impact quantity demanded for another good?

cross-price elasticity of demand

If the percentage change in price is less than the percentage change in quantity demanded, then the good is ______. Multiple choice question.

elastic

If the price of a good rises, the amount purchased falls, and the amount of money spent on the good also falls, that good has ______ demand.

elastic

On a linear downward sloping demand curve, at a high price, the elasticity label associated with it is ______.

elastic

The demand for a particular farmer's corn is likely to be perfectly_________ because that farmer has no influence over the price regardless of how much that farmer can produce.

elastic

Suppose you were contemplating whether to indulge in your favorite luxury (and it was something you don't need). Demand for this is likely to be highly

elastic.

If a good exhibits unitary elastic demand, then the percentage change in the quantity demanded is ______ the percentage change in the price.

equal to

If a good exhibits elastic demand, then the percentage change in the quantity demanded is ______ the percentage change in the price.

greater than

The elasticity of demand for a particular brand of a good (say Barilla spaghetti) is almost certain to be ______ the elasticity of the demand for the type of good (any spaghetti).

greater than

If the percentage change in price is greater than the percentage change in quantity demanded, then the good is ______.

inelastic

If the price of a good rises, the amount purchased falls, and the amount of money spent on the good also falls, that good has ______ demand. Multiple choice question.

inelastic

On a linear downward sloping demand curve, at a low price, the elasticity label associated with it is ______.

inelastic

On a linear downward sloping demand curve, at a low price, the elasticity label associated with it is ______. Multiple choice question.

inelastic

Suppose you broke your leg and you were on the way to the hospital, one would likely consider your demand for health care services (specifically having your leg set and put into a cast) to be highly ______.

inelastic

If a good exhibits inelastic demand, then the percentage change in the quantity demanded is ______ the percentage change in the price.

less than

The "responsiveness" for elasticity of demand is measured in ______ terms.

percentage

The "responsiveness" for elasticity of supply is measured in ______ terms.

percentage

Suppose an industry has no spare capacity in the short run and all production takes place in facilities producing 24 hours a day, 7 days a week, 365 days per year. Supply in that industry would likely be

perfectly (or near perfectly) inelastic.

Income elasticity of demand is a measure of how a change in income impacts ________. Multiple choice question.

quantity demanded

Elasticity is a measure of ______?

responsiveness

Cross-price elasticity of demand is a measure of how a change in the price of one good impacts ______. Multiple choice question.

the quantity demanded for another good

Suppose you are looking at a price-quantity combination of P = 5, Q = 10. The reason a relatively flat demand curve is more elastic than a relatively steep one going through that same point is that (Select all that apply.)

the steeper one shows a lower degree of responsiveness of quantity to changes in price. the flatter one shows a greater degree of responsiveness of quantity to changes in price

Suppose you are looking at a vertical demand curve ______.

there is no responsiveness to changes in price so it is perfectly inelastic

If the price of a good rises, the amount purchased falls, and the amount of money spent on the good stays exactly the same, that good has ______ demand

unit elastic

On a linear downward-sloping demand curve, at a moderate price (exactly in the middle of the demand curve), the elasticity label associated with it is ______.

unit elastic

If the percentage change in price is equal to the percentage change in quantity demanded, then the good is ______.

unitary elastic