Graded assignment #5
inelastic, because revenue decreases as the price decreases.
A is part of the way down on the right side
-1.50 -1.22
A movement along the demand curve, represented by points A and B, is shown in the diagram to the right. Point A (40, 60) is the initial point, and point B (50, 50) is the point after the price change.
-1.00 -0.82
A movement along the demand curve, represented by points A and B, is shown in the diagram to the right. Point A (50, 50) is the initial point, and point B (60, 40) is the point after the price change.
-3.67 -1.00 -0.27 Falls Remains constant Rises
A sporting goods store has estimated the demand curve for Brand A running shoes as a function of price
Perfectly elastic
An increase in demand caused no change in the equilibrium
elastic, because revenue increases as the price decreases
Consider point A shown along the total revenue curve in the graph below.
the percentage change in quantity of a product demanded is the same as the percentage change in price in absolute value (a demand elasticity of 1).
Demand has unitary elasticity if
Straight down line
Demand in which quantity demanded does not respond at all to a change in price
Straight horizontal line
Demand in which quantity demanded drops to zero at the slightest increase in price is called perfectly elastic.
Elastic
If total revenue increases as price decreases, demand is
Inelastic
If total revenue increases as price increases, demand is
False
In general, luxury items tend to have inelastic demand
True
In general, the more of your income a product consums, the more elastic is its demand
Get smaller False
In terms of absolute value, elasticity values _________ as price decreases along a downward-sloping demand curve
2175 2550 Rises Elastic
In the diagram to the right, you are initially at point A. What is total revenue
Picture
On the graph to the right show the elastic and inelastic portions of a linear demand curve
-0.36
Portable hard drive
the ratio of the percentage of change in quantity demanded to the percentage of change in price.
Price elasticity of demand is defined as
5.00 Shortage
Studies have fixed the short-run price elasticity of demand for gasoline at the pump at minus0.20. Suppose that international hostilities lead to a sudden cut-off of crude oil supplies. As a result, U.S. supplies of refined gasoline drop 30 percent.
5.53 shortage
Studies have fixed the short-run price elasticity of demand for gasoline at the pump at minus0.20. Suppose that international hostilities lead to a sudden cut-off of crude oil supplies. As a result, U.S. supplies of refined gasoline drop 45 percent.
Total revenue will fall
Suppose price decreases and demand is inelastic. What happens to total revenue?
Total Revenue will fall
Supposed price increases and demand is elastic. What happens to total revenue?
More elastic
Taxicab rides are _______ than anticipated by taxicab drivers
Complements Substitutes
The cross-price elasticity values for three sets of products and listed in the table below
True
The demand for gasoline is likely to be more inelastic than the demand for sushi.
-0.2 -20 Similar Does not change
The demand for hamburgers is shown, with hamburgers priced in dollars in Figure a and pennies in Figure b.
-0.2 -20 The exact same Does not change
The demand for hamburgers is shown, with hamburgers priced in dollars in Figure a and pennies in Figure b.
Cross-price elasticity of demand is negative, since the items are complements
The demand for hot dog buns rises when hot dog prices fall. nothing
increase the quantity of education demanded by 14%
The income elasticity of demand for education is 3.5
True
The more substitutes that are available for a product, the more elastic is its demand
-1.4
The quantity of peanuts demanded increases from 6 pounds to 9 pounds when the price of peanuts decreases from $4 per pound to $3 per pound. In this price range and using the midpoint formula, the price elasticity of demand for peanuts is
-25%
The quantity of peanuts demanded increases from 6 pounds to 9 pounds when the price of peanuts decreases from $4 per pound to $3 per pound. The percentage change in the price of peanuts is
50%
The quantity of peanuts demanded increases from 6 pounds to 9 pounds when the price of peanuts decreases from $4 per pound to $3 per pound. The percentage change in the quantity of peanuts demanded is
-2.0
The quantity of peanuts demanded increases from 6 pounds to 9 pounds when the price of peanuts decreases from $4 per pound to $3 per pound. The price elasticity of demand for peanuts is
Complements Complements
The cross-price elasticity values for three sets of products are listed in the table below.
Apple raise: No, because demand is unit elastic Florists: Yes, because demand is inelastic Electronic cig: Yes, because demand is elastic
Use the table below to answer the following questions
-0.60 -2.17
Using the midpoint formula and the graph on the right, calculate the price elasticity of demand when the price changes from $ 5 to $ 10 and when the price changes from $ 10 to $ 16.
-0.71 -2.22
Using the midpoint formula and the graph on the right, calculate the price elasticity of demand when the price changes from $ 7 to $ 12 and when the price changes from $ 12 to $ 18.
-2.33
Using the midpoint formula, calculate elasticity for the following change in demand
% change in quantity of Y demanded ----------------------------- % change in price of X
Which of the Following is used to calculate cross-price elasticity of demand
% change in quantity demanded --------------------------- % change in income
Which of the following is used to calculate income elasticity of demand
In the long run, households make adjustments over time and producers develop substitute goods
Why is demand likely to become more elastic, or responsive, in the long run?
Disagree: When price decreases and demand is relatively elastic, total revenue will rise.
Every year Christmas tree vendors bring tens of thousands of trees from the forests of New England to New York City and Boston. During the last two years, the market has been very competitive; as a result, price has fallen by 10 percent. If the price elasticity of demand was
Inelastic due to a lack of close substitutes and its necessity for diabetics
Explain whether demand is likely to be elastic or inelastic for insulin
Apple watch 25% Roses -10% Electronic cigarettes -3.8
Fill in the missing amounts in the following table
Demand determines price solely
For . perfectly price inelastic supply
There should be an availability
For a demand curve to be more elastic
The item shoudl represent a small portion of an individuals total bduget
For a demand curve to be more inelastic
Income elasticity of demand is positive
For the following statement, state the relevant elasticity and state what its value should be (negative, positive, greater than one, zero, and so on).
increasing, and it is an inferior good
If income is falling and income elasticity of demand for a particular good is negative, then demand for the good is:
