economics 4
If the price of a soda increases from 75¢ to $1.00 and as a result the quantity demanded of sodas decreases from 10 to 9 per week, the elasticity of demand for sodas equals
0.37.
A rise in the price of oranges from $2.00 to $2.50 per pound decreases the quantity demanded from 2,000 to 1,800 pounds. The price elasticity of demand for oranges is
0.47.
Suppose that the quantity of pizza sold decreased by 15 percent after an increase in price of 10 percent. What is the price elasticity of demand for pizza?
1.50
An elasticity of demand is measured in
A) dollars. B) dollars per unit of output. C) units of output. None of the above answers is correct because there are no units for an elasticity of demand
Which of the following goods would have the smallest elasticity of demand?
A) insulin sold to diabetics
The concept of elasticity of supply measures the responsiveness of the
A) quantity supplied to a change in price
Demand is inelastic when a price ________ results in total revenue ________.
A) rise, increasing
If the price of oil is $20 per barrel, the quantity of oil supplied is 70 million barrels per day. If the price is $15 per barrel, the quantity of oil supplied is 69 million barrels per day. What is the elasticity of supply of oil?
B) 0.05
If a 20 percent increase in the price of a used car results in a 10 percent decrease in the quantity of used cars demanded, then the price elasticity of demand equals
B) 0.5.
If the price elasticity of demand for a good is 0.8, then
a 1 percent rise in the price leads to a 0.8 percent decrease in the quantity demanded.
If the cross elasticity of demand between coffee and tea is positive, an increase in the price of tea will shift the demand curve for
coffee rightward.
When the percentage change in the quantity demanded is less than the percentage change in the price, then
demand is inelastic.
According to the total revenue test, a price cut increases total revenue if demand is
elastic.
Which goods have more elastic demands?
goods with many substitutes
If demand is inelastic, an increase in the price will
increase total revenue.
If the quantity demanded changes by a relatively small amount for a given change in price, then demand is
inelastic
If a 20 percent increase in the price of a used car results in a 10 percent decrease in the quantity of used cars demanded, then the demand for used cars is
inelastic.
If the income elasticity of demand for spaghetti is -1.3, then spaghetti
is an inferior good.
At the midpoint of a downward sloping straight-line demand curve, the demand
is unit elastic.
The cross elasticity of demand for pizza with respect to the price of a soda is
negative because the goods are complements.
Suppose the price of burgers increases from $1 to $2 each. The degree to which quantity demanded responds to this price increase depends on the
price elasticity of demand
Elasticity generally measures the
responsiveness of a variable to a change in another variable
Demand is elastic when a price ________ results in total revenue ________.
rise, decreasing
If a price increase of 5 percent increases the quantity demanded of another good by 2 percent, the goods must be ________ and the cross elasticity of demand equals ________.
substitutes
If the cross elasticity of demand for good x with respect to the price of good y is positive, then goods x and y are
substitutes.
If a small percentage decrease in the price of chocolate causes a larger percentage decrease in the quantity supplied, the
supply of chocolate is elastic.
A normal good is defined as a good for which
the demand curve shifts rightward as income increases
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 equals the magnitude of
the percentage change in the quantity demanded of a good divided by the percentage change in its price.
If the demand for a good is elastic, that means that when price increases
the quantity demanded will decrease by a greater percentage than the price increased.