8-1 Quiz

If the own price elasticity for the beef is -0.43, one would say a 100% increases in beef price would lead to a ____in beef consumption.

43% decrease

In 2016, the price of Honda in Pullman, Washington was $16,000 and 60 were sold. In 2017, the price increased to $18,000 and 30 were sold. How much is total revenue in 2017?

540,000

In 2016, the price of Honda in Pullman, Washington was $16,000 and 60 were sold. In 2017, the price increased to $18,000 and 30 were sold. How much is total revenue in 2016?

960,000

The cross-price elasticity of demand for complements is _____________________.

< 0

The absolute value of own-price elasticity of demand for an inelastic response is

< 1

The cross-price elasticity of demand for two independent goods is _____________________.

= 0

The absolute value of own-price elasticity of demand for a unitary elastic response is ___________.

= 1

The cross-price elasticity of demand for substitutes is _____________________.

> 0

The absolute value of own-price elasticity of demand for an elastic response is ___________.

> 1

T or F: If the estimated price elasticity of demand for sunflower seeds is -0.35, one could expect that a 100 percent increase in price would lead to a 3.5 percent decrease in the quantity of sunflower seeds demanded.

False

T or F: Necessities have highly elastic demand curves

False

T or F: The industry demand curve is the vertical summation of individual demand curves.

False

T or F: The law of demand states that the quantity of goods or services demanded will vary directly with the price of the goods or services.

False

T or F: The quantity demanded of a good increases if the price of the good increases (assuming everything else does not change).

False

T or F: A flatter demand curve is more inelastic.

False

Two types of price elasticity of demand measures are: (1) __________________________elasticity measures the responsiveness of the quantity demanded of a good to changes in the price of that good; and (2) ___________________ elasticity measures the responsiveness of the quantity demanded of a good to changes in the price of a related good.

(1) own-price; (2) cross-price

If the quantity of acreage planted to barley (SB) and hence, barley production decreases from 1,500 to 600 acres in response to an increase in the price of wheat from $4 to $8 per bushel, calculate the cross-price elasticity of barley with respect to wheat (EBW)

-0.6

There are three consumers, i.e., A, B, and C. Assuming the peanut price increases from $1 to $1.25 per unit. Consumer A $1 = 16 (quantity) and $1.25 = 13 (quantity). Please calculate the elasticity coefficient of demand (use point-elasticity) for each individual with the following price/quantity changes:

-0.75

There are three consumers, i.e., A, B, and C. Assuming the peanut price increases from $1 to $1.25 per unit. Consumer A $1 = 24 (quantity) and $1.25 = 18 (quantity). Please calculate the elasticity coefficient of demand (use point-elasticity) for each individual with the following price/quantity changes:

-1.00

In 2016, the price of Honda in Pullman, Washington was $16,000 and 60 were sold. In 2017, the price increased to $18,000 and 30 were sold. Calculate the own price elasticity of demand by using point elasticity.

-4

__________________________________ results from changes in the price of the product and are movements along a demand curve.

Change in quantity demand

If the price of a good decreases from $2.00 to $1.50 per unit, the quantity demanded of the good increases from 2 to 6 units, we can classify this good as a ___________ good.

Elastic

Which one of these would shift the demand curve?

Population

If the calculated price elasticity of demand for cashew nuts were -0.09, then one would expect that a 10 percent decrease in the retail price of cashew nuts would result in:

a 0.9 percent increase in the quantity demanded

Demand is more _____, the more substitutes are available for the product.

elastic

For an inelastic product, an increase in production price will cause the total revenue ____.

increase

The elasticity of oil demand has been estimated at -0.6. A 10% rise in oil prices would lead to total revenues to the oil producers __________.

increase

Most agricultural products are considered to be _______ in demand.

inelastic