Combo with "Econ 102 Vazquez Exam 2" and 5 others
Mark and Rasheed are at the bookstore buying new calculators for the semester. Mark is willing to pay $75 and Rasheed is willing to pay $100 for a graphing calculator. The price for a calculator at the bookstore is $65. How much is Mark's individual consumer surplus?
$10
Ahmed is willing to mow lawns for $10 each, Boris is willing to mow lawns for $20 each, and Chelsea is willing to mow lawns for $30 each. If the going rate for lawn mowing is $18, what is the total producer surplus received by the three of them?
$8
quantity of skis rented, then the cross-price elasticity of demand between lodging and ski rentals is:
-1.20
Which of the following could be a possible cross elasticity of demand measure for two products such as peanut butter and jelly?
-20.8
One would expect to see supply become more price ________ as harvest season approaches and crops are being brought in from the fields.
-elastic
If a 1% increase in the price of gummy bears causes gummy bear sales to decline by .4%, then the price elasticity of demand is:
0.4.
If the price increases by 100% and the quantity decreases by 50%, then the elasticity of demand is ___.
0.5
If the price of apples increases by 10% and that causes sales to drop by 5%, the elasticity of demand for apples is:
0.5%.
You are willing to sell your coin collection for a minimum price of $1,000. You find a buyer who offers $2,100. In this transaction, you will receive ________ in producer surplus.
1,100
Tomas produces 100 units of Good Y when the price is $5 and 150 units of Good Y when the price is $7. What is the value of Tomas's price elasticity of supply?
1.2
A local restaurant has estimated that the price elasticity of demand for meals is equal to 2. If the restaurant increases menu prices by 5%, they can expect the number of customers to decrease by ________and total revenue to ________.
10%; fall
A grocery store announced a 50% decrease in the price of local honey. Sales increased by 200%. The price elasticity of honey is:
4.
Wal-Mart is thinking about offering a 25% discount on a brand of shoes. If the elasticity of demand is two, then the discount would increase sales by:
50%.
The income elasticity of demand for eggs has been estimated to be 0.57. If income grows by 5% in a period, how will that affect demand for eggs in that period, all other things unchanged?
Demand will increase by about 2.9%.
The absolute value of the price elasticity of demand for gasoline in the short run has been estimated to be 0.1. If a war in the Middle East causes the price of oil (from which gasoline is made) to increase, how will that affect total expenditures on gasoline in the short run, all other things equal? (Hint: Consider the change in gasoline prices.)
Demand will not change much, but total expenditures will rise.
The price of a gallon of gasoline increases 10% this year. As a result, which of the following events is most likely to occur?
Gasoline expenditures will increase if gasoline is an inelastic good.
Which of the following best describes price elasticity of demand?
Price elasticity of demand measures the responsiveness of the change in the quantity demanded to a change in price.
The price elasticity of demand for gasoline in the short run has been estimated to be 0.4. If a war in the Middle East causes the price of oil (from which gasoline is made) to increase, how will that affect total revenue from gasoline in the short run, all other things unchanged?
Quantity demanded will decrease; total revenue will rise.
The price elasticity of supply for a good is 3 if:
a 1% decrease in price leads to a 3% decrease in quantity supplied.
if the price elasticity of demand is .1, then for every 10% decrease in quantity demanded, there is ______
a 100% increase in price
If the estimated price elasticity of demand for foreign travel is 4, then:
a 20% decrease in the price of foreign travel will increase quantity demanded by 80%.
A price ceiling imposed below the equilibrium price of a good will cause
a supply shortage.
Adie wants to take some online classes this semester. She is willing to pay $1,000 for the first class, $800 for the second, $700 for the third, and $500 for the fourth. If online classes cost $750, Adie will take ________ online classes and her consumer surplus will equal ________.
a. 2; $300
If a store deals in a good with a highly elastic demand, then a decrease in the price would lead to:
an increase in total revenue.
Which of the following pairs of goods are most likely to have a cross-price elasticity of demand that is greater than zero?
apples and bananas
If the price of a good is increased by 15% and the quantity demanded changes by 20%, then the absolute value of the price elasticity of demand is equal to:
approximately 1.33.
If marginal cost is greater than average total cost, then:
average total cost is increasing.
Which commodity would have the most inelastic demand curve?
beer
if 2 goods are complements, then the cross-price elasticity of demand between them is
c. negative.
If your income increases and your consumption of a good increases, that good is considered a(n)
c. normal good.
Determining the price elasticity of demand involves all of the following factors except:
c. the slope of the supply curve.
The pair of items that is likely to have the highest cross-price elasticity of demand is:
coffee and tea.
Which commodity probably has the highest elasticity of demand?
college tuition
If your purchases of shoes decrease from 11 pairs per year to 9 pairs per year when the price of shirts increases from $8 to $12, then, for you, shoes and shirts are considered:
complementary goods.
We note that the price of pretzels increases and the demand for tortilla chips decreases, so we can assume that these two goods are:
complementary goods.
The percentage change in quantity demanded of one good or service divided by the percentage change in the price of a related good or service is:
cross-price elasticity of demand.
The price elasticity of demand along a demand curve with a constant slope:
decreases in absolute value as quantity demanded rises.
On a linear demand curve:
demand is elastic at high prices.
Price ceilings may be imposed if:
demanders can make strong moral or political arguments for lower prices.
The price elasticity of demand is measured by:
dividing the percentage change in quantity demanded by the percentage change in price.
A fixed cost is a cost that:
does not vary with quantity produced.
If the price of Citgo gasoline increases 10% and the quantity demanded decreases 20%, then the demand curve for gasoline is:
elastic.
If the price elasticity of demand for concert tickets is 2.12, then the demand is _____ and total revenue will ______ if the price of concert tickets increases.
elastic; decrease
Demand is unit elastic when the absolute value of the price elasticity of demand is:
equal to 1.
The demand for strawberry ice cream tends to be relatively price-elastic because:
for most people there are many close substitutes for strawberry ice cream.
For which of the following is the cross-price elasticity of demand most likely a large positive number?
french fries and onion rings
The income elasticity of demand of a normal good is:
greater than 0
To say that two goods are substitutes, their cross-price elasticities of demand should be:
greater than 0.
A major state university in the South recently raised tuition by 12%. An economics professor at this university asked his students, "Due to the increase in tuition, how many of you will transfer to another university?" One student out of about 300 said that he or she would transfer. Based on this information, the price elasticity of demand for education at this university is:
highly inelastic.
The pair of items that is most likely to have a negative cross-price elasticity of demand is:
hot dogs and mustard
An important determinant of the price elasticity of demand is the:
importance of the good in household budgets.
When the demand for foods low in carbohydrates began to increase, in the short run the price elasticity of supply was lower than it will be in the long run. This is because
in the short run, some food producers did not have as much time to produce low-carb foods as they will have in the long run.
The percent change in quantity demanded divided by the percent change in income, all other things unchanged, is:
income elasticity of demand.
We would say that apples are a normal good if the ___________ for apples is __________ .
income elasticity of demand; positive.
When the absolute value of the percentage change in quantity demanded is less than the absolute value of the percentage change in price, demand is:
inelastic
The demand curve for cigarettes is probably:
inelastic.
If the price elasticity of demand for digital cameras is 0.88, then the demand is _____ and total revenue will ______ if the price of cameras increases.
inelastic; increase
If an increase in income of 10% causes the quantity demanded for generic macaroni and cheese to fall by 5%, then generic macaroni and cheese is a(n):
inferior good.
Suppose your income falls from $35,000 to $33,000 and that your quantity demanded of a good that you buy increases in response from 40 to 55. The good is said to be a(n):
inferior good.
if income decreases and the consumption of a certain good increases, that good is considered a(n)
inferior good.
The income elasticity of demand of an inferior good:
is less than 0.
If two goods are complementary, we can assume that the cross-price elasticity of demand for these goods is:
less than 0.
The cross-price elasticity of demand of complementary goods is:
less than 0.
Which of the following would result in higher price elasticity?
longer time period
If an increase in income of 10% causes an increase in quantity demanded of 20% for a good, the good is a(n):
luxury good.
If a good is a necessity with few substitutes, then the price elasticity of demand will tend to be
more price-inelastic.
If soda and potato chips are complements, then their cross elasticity of demand is
negative.
If soda and potato chips are complements, then their cross elasticity of demand is:
negative.
If the income elasticity of demand for a good is positive, the good is said to be a(n):
normal good.
If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when your income increases from $19,000 to $21,000 a year, other things equal, then, for you, shoes are considered a(n):
normal good.
If an increase in income leads to an increase in the demand for a good, then the good is said to be:
normal.
If the price of emergency visits to the doctor were to rise, we would expect:
only a slight decline in the number of emergency visits to the doctor.
A vertical demand curve is:
perfectly inelastic.
If 2 goods are substitutes, then the cross-price elasticity of demand between them is:
positive.
The ratio of the percentage change in the quantity demanded to the percentage change in price is the:
price elasticity of demand.
If a university decreases the price of tickets to football games to collect more revenue, it is assuming that the demand for tickets is
price-elastic.
If the quantity supplied responds substantially to a relatively small change in price, supply would be:
price-elastic.
If the University of Michigan increases the price of football tickets, this will result in increasing revenues if the price elasticity of demand is:
price-inelastic.
If the price elasticity of demand is found to be -3⁄4, then demand is:
price-inelastic.
If the quantity demanded of agricultural output is very unresponsive to a fall in price, the demand for agricultural output is
price-inelastic.
Suppose that an increase in the price of a good leads to an increase in total revenue. Ignoring other factors (like supply), at its current price the good must be:
price-inelastic.
Rent controls set a price ceiling below the equilibrium price and therefore
quantity demanded exceeds the quantity supplied.
The price elasticity of supply is computed as the percentage change in:
quantity supplied divided by the percentage change in price.
If the price of a good is held above the equilibrium price
quantity supplied will exceed quantity demanded.
The university president believes that increasing student tuition by 5% will increase revenues. If the president is correct that revenues will increase, then the tuition increase will:
reduce the number of students enrolling by less than 5%.
If the cross elasticity of demand for good A with respect to good B is 2.3, then good A is a(n):
substitute for good B
If the price of chocolate-covered peanuts increases and the demand for strawberry licorice twists increases, this indicates that these two goods are:
substitute goods.
If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when the price of shirts increases from $8 to $12, then, for you, shoes and shirts are considered:
substitute goods.
Since the price of walnuts increases as the demand for cashews increases, we can assume that these two goods are:
substitute goods.
If the cross elasticity of demand between chicken and fish is 0.8, then chicken and fish are:
substitutes.
Suppose that the cross-price elasticity of demand for Mountain Dew with respect to the price of Coke is 0.7. This implies that the two goods are
substitutes.
Goods are ________ when the cross-price elasticity of demand is positive and ________ when the cross-price elasticity of demand is negative.
substitutes; complements
Government may choose to impose a price floor if
suppliers can make strong moral or political arguments for higher prices.
If the price elasticity of supply is greater than 1, then
supply is price-elastic.
If an increase in the price of a good leads to an increase in total revenue, then:
the demand curve must be price inelastic.
The price elasticity of a good will tend to be greater:
the longer the relevant time period.
If a 20% price increase generates a 20% decrease in quantity demanded, then this is a(n) ________ response.
unit-elastic
A perfectly price-inelastic demand curve is
vertical.
If a frost destroys much of the grapefruit crop, total surplus:
will decrease.