Chapter 5 eco HW Exam 2

Jeans in general have fewer close substitutes than a specific brand of jeans. Therefore, the demand for jeans in general will be _______ than the demand for a specific brand of jeans.

less elastic

Suppose two demand curves intersect and so have a point in common. At that point, demand shown by the steeper curve will be _______ the flatter curve.

less elastic than

If the price elasticity of demand for a good equals one then the demand for that good is

unit elastic

If Mallory and Rick are the only two consumers in this market, then the market demand for soda will be 90 cans per month when the price of a can of soda is:

$0.50

Suppose that tom bought a bike from Helen for $195. If Helen's reservation price was $185 and toms reservation price was $215 the sellers surplus from this transaction was:

$10

Suppose that tom bought a bike from Helen for $195. If Helen's reservation price was $185 and toms reservation price was $215 the total economic surplus from this transaction was:

$30

If the quantity demanded of a good is Q when the price for the good is P the price elasticity of demand for that good at that point is

(P/Q) × (1/slope)

The student union sells a total of 7,200 scoops of ice cream each week at a price of $2.00 per scoop. If every student who buys ice cream has the demand curve shown above, then there must be ___ students purchasing ice cream each week.

1,200

When P=4 the price elasticity of demand for the demand curve D1 is ___ and D2 is ___

1/3; 2/3

What is the market demand for shoes when the price is $50 a pair

11 pairs

Suppose that at a price of 25 cents per orange, 500 consumers each demand 4 oranges, and at a price of 20 cents per orange, 750 consumers each demand 5 oranges. Therefore the market demand for oranges is ___ at a price of 25 cents per orange and ___ at a price of 20 cents per orange.

2000; 3750

Fran is one of the students whose demand curve for ice cream is shown above. When price is $4.00, Fran demands ___ scoops a week and when price is $2.00 Fran demands ___ scoops

2;6

For demand curve D1 what is the price elasticity of demand when P=12

3

If 20% increase in the price of a good leads to a 60% decrease in the quantity demanded, then what is the price elasticity of demand?

3

The price elasticity of demand at point B is

4/3

If the price elasticity of demand for chicken is 2, then a 20% decrease in the price of chicken will lead to a:

40% increase in ghe quantity demanded of chicken

If Laura and chris are the only two consumers in this market then at a price of $2.00 per pound, the market demand for hamburger is:

6 pounds per week

When the price of a doughnut is 50 cents, what is the market demand for doughnuts?

9 doughnuts

Suppose Bianca buys a used a textbook from Sebastian for $55. If Bianca's surplus from this transaction was $10, we can infer that:

Bianca's reservation price was $65.

If the absolute value of the slope of the demand curve is .25 price is $8 per unit and quantity demanded is 12 units then demand for this good is

Elastic

When the price of NBA tickets of $25 each, 30,000 tickets are sold. After the price rises to $30 each, 20,000 tickets are sold. At the original price the demand for NBA ticket is:

Elastic

When the demand for a good is in elastic that good is likely to have

Few close substitutes

Suppose that there is only one small clothing store in the remote village of Green acres, and until recently the townspeople brought their shirts there. As more people in green acres become connected to the internet, the price elasticity of demand for shirts at the green acres store will:

Increase because the internet offers more substitutes

Is Laura and chris are the only two consumers in this market, then when the price of a hamburger decreases from $2.50 to $2.00 per pound, the quantity demanded in the market will ___ by ___ pounds per week

Increase, 1.5

The price elasticity of demand is typically expressed as a positive number because:

It's convenient to use absolute values

market equilibrium

Leaves no unexploited opportunities for undividuals

At a price of $15 the price at which the two demand curves intersect the price elasticity of demand for the new drug is ___ the price elasticity of demand for the over the counter pain reliever

Less than

Suppose you have one hour to catch a flight to Miami for spring break and it takes 45 minutes to dive to the airport. Your car is almost out of gas and the price of gas at the closest gas station is higher that at other gas stations that are much further away. To you the price elasticity of demand for gas is likely to be ___ than ig would be if you had several hours before the flight.

Lower

If the demand curve for a good is a vertical line at Q=1 then a decrease in the price of that good will:

Not change the quantity demanded

At point D demand is

Price inelastic

If consumers can easily switch to a close substitute when the price of a good increases, demand for that good is likely to be:

elastic

Suppose the price P on a given demand curve results in a price elasticity of demand equal to 1. Any price higher than P will lie on the ___ part of the demand curve and any price lower than P will lie on the ___ part of the demand curve

elastic and inelastic

To increase total revenue firms with ___ demand should lower price and firms with ___ demand should increase price.

elastic and inelastic

Suppose a 10% increase in the price of aspirin leads to a 5% decrease in the quantity demanded of aspirin. The demand for aspirin, therefore, is

inelastic

Suppose the company that owns the vending machines on your campus has doubled the price of a can of soda. They then notice that they are selling approximately 15% fewer sodas. The price elasticity of demand for sodas from the campus vending machines therefore is:

inelastic

Suppose that the short-run price elasticity of demand for electricity is 0.03, and the long-run price elasticity of demand is 1.2. One would classify the short-run elasticity as being ___________ and the long-run elasticity as being ____________.

inelastic; elastic

If the demand curve is horizontal then demand is

perfectly elastic

When the price of insulin was $10, consumers demanded 100 units; when the price was $15, consumers demanded 100 units; and when the price was $20, consumers demanded 100 units. Based on this information, insulin must have a(n) _______ demand curve

perfectly inelastic

When calculating price elasticity of demand if the percentage change in price is negative then the percentage change in quantity demanded is typically:

positive

If the slope of a demand curve is infinite, then the price elasticity of demand is:

zero