Econ chapter 4 hw

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Demand is income elastic if

a small percentage increase in income results in a large percentage increase in quantity demanded

Dan sells newspapers. Dan says that a 4 percent increase in the price of a newspaper will decrease the quantity of newspapers demanded by 8 percent. According to​ Dan, the demand for newspapers is​ ________

elastic

The air route from Dallas to Mexico City is served by more than one airline. The demand for tickets from American Airlines for that route is probably

elastic and more elastic than the demand for all tickets for that route

The price elasticity of demand for furniture is estimated at 1.3. This value means a one percent increase in the

price of furniture will decrease the quantity of furniture demanded by 1.3 percent

The income elasticity of demand is a measure of the responsiveness of the

quantity of a good demanded to changes in income

The elasticity of supply measures the sensitivity of

quantity supplied to a change in price

If hot dog vendors at baseball games want to maximize their total sales​ revenue, they will have to

set the price of their hot dogs so that the demand is unit elastic

A normal good is defined as a good for which the demand curve

shifts rightward as income increases

The price elasticity of demand measures

the responsiveness of the quantity demanded to changes in price

If the income elasticity for chocolate chip cookies is​ 1.84, then chocolate chip cookies are

a normal good and income elastic

A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is

0.5

When the price of a movie ticket increases from​ $5 to​ $7, the quantity of tickets demanded decreases from 600 to 400 a day. What is the price elasticity of demand for movie​ tickets?

1.20

Supply is elastic if

a 1 percent change in price leads to a larger percentage change in quantity supplied

Demand is unit elastic when

a change in the price of the product leads to no change in the total revenue

If goods are​ complements, then their

cross elasticities are negative

The price elasticity of demand for DVDs is 2. If the price of a DVD increased by 2​ percent, the quantity demanded will​ ________

decrease by 4 percent

The price elasticity of supply of laptop computers equals 1.5 if

for every 1 percent that laptop prices​ increase, computer makers produce another 1.5 percent laptops

If demand for Farmer​ John's maple syrup is​ inelastic, then when Farmer John raises the price of maple​ syrup, his total revenue will

increase

If demand is​ inelastic, an increase in the price will

increase total revenue

Aglets are the metal or plastic tips on shoelaces that make it easier to lace your shoes. The demand for aglets is probably

inelastic

The cross elasticity of demand measures the responsiveness of the quantity demanded of a particular good to changes in the prices of

its substitutes and its complements

The income elasticity of demand is largest for

luxuries

When​ consumers' incomes increased 10​ percent, the quantity of milk bought increased 5 percent. This result means

milk is a necessity

A university conducts a survey of​ students, which shows that a 10 percent tuition hike would lead to a 12 percent decrease in the enrollment. If the university wants to increase its total​ revenue, it should​ ________ tuition because the demand for education at this university is​ ________

not raise; elastic

The price elasticity of supply is calculated as the

percentage change in quantity supplied divided by the percentage change in price

The price elasticity of demand is equal to the​ ________ in the​ ________ divided by the​ ________ in the​ ________

percentage​ change; quantity​ demanded; percentage​ change; price

Blue pens and black pens are close substitutes. The cross elasticity of demand for black pens with respect to the price of blue pens is​ ________

positive

When​ consumers' incomes increased 6​ percent, the quantity of wine bought increased 12 percent. This result means

wine is a luxury

Donuts and coffee are complements. When the price of a donut​ increases, the demand for coffee​ ________ and the cross elasticity of demand for coffee with respect to the price of a donut is​ ________

​decreases; negative

Bus rides and canned soup are inferior​ goods, so the​ ________ elasticity of demand is​ ________

​income; negative

The price of milk​ rises, so the supply of ice cream decreases. there​ is, as a result a 5 percent increase in the price of ice cream and a 3 percent decrease in the quantity of ice cream sold. The revenue received by ice cream suppliers will​ ________ because the demand for ice cream is​ ________

​increase; price inelastic


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