Eco week 4
If quantity demanded goes down by 3% when the price rises by 6% then the price Elasticity of demand is
0.5. Because the price elasticity of demand is the percentage change in the quantity demanded divided by the percentage change in price =3 divided by 6
If the income elasticity of demand for pasta is -1.0% then a 10% increase in income will lead to a________And the quantity of pasta demanded
10% increase A 10% increase since -1.0 times -10 equals 10
In the figure on the right, if the price of grapes is a dollar per pound, what will be the total expenditure on grapes each day?
10,000
If quantity demanded goes up by 10% then price falls by 2%, then the price elasticity of demand is
5 because 10\2=5
If the dollar price of housekeeping services falls, and the average dollar price of all other good stay the same, then the real price of housekeeping services will
Decrease
If the price elasticity of demand is greater than one and price increases, then total expenditure well
Decrease
Suppose the demand for first class airline tickets is any elastic with respect to price. If the price of first class airline tickets decreases, then total expenditure well
Decrease
If the price list city of demand for restaurant meals is $1.63, then the demand for restaurant meals is
Elastic, because if the price elasticity of demand is greater than one, then demand is elastic with respect to price
A horizontal addition is a term used to
Emphasize that we are adding quantities which are measured on the horizontal axis of individual demand curves
True or false, economics believe that our preferences for different goods and services do not change over time
False
Suppose most people either drive or take the bus to work. If the bus fares increase, then you would expect_________ people to take the bus and__________People to drive
Fewer, more
If the price elasticity of demand for beer is a $1.19 and the price of beer goes up by 1% and the quantity of beer demanded well
Go down down 1.19% The Elasticity of demand is the percentage change in quantity demanded that results from a 1% change in price. In this case, quantity demanded goes down since price goes up
Low income families spend a greater share of their budget on electricity than do high income families. First we would expect the price elasticity of demand for electricity to be_________For low income families than for high income families
Higher
That elasticity of demand for a given brand of ice cream is likely to be________ than the Elasticity of demand for ice cream in general
Higher
The figure to the right shows Jeffries monthly demand for soap. If there are 1000 people in the market including Jeffrey, each with demand curve like Jeffrey, then what is the market demand for soap each month when the price of soap is a dollar per bar?
If you look at the graph where it shows where the dollar sign is that you will see it will point to a quantity of five bars. When the price is one dollar, Jeffrey demands five bars of soap per month then, so if there are 1000 people in the market like Jeffrey and the quantity demanded will be 5000
If the dollar price of gold doesn't change, but the average dollar price of all other goods decreases, then the real price of gold will
Increase
If demand is perfectly elastic with respect to price? Then the price elasticity of demand is
Infinite
The law of demand states that people do_________Of what they want to do as a cost of doing it rises
Less
If ground beef is an inferior good, then the income elasticity of demand for ground beef will be
Negative
The number written on a price tag is a good's
Nominal price
The price is listed on the menu at your favorite restaurant are________.
Nominal prices
What is the formula for the price elasticity of demand?
P/Q x 1/slope
If the price elasticity of demand is zero, then demand is
Perfectly in elastic
The percent change in quantity demanded that results from a 1% change in price is the
Price elasticity of demand
If the cross price elasticity of demand for baseball caps with respect to the price of sunglasses is positive, then the two goods are
Substitutes
When the price of a good goes up, part of the reason consumers purchase less of the good is that they
Switch to less expensive substitutes
The nominal price of a good is
The absolute price of the good in dollar terms
The real price of a good is
The dollar price of a good relative to the average dollar price of all other goods.
The price elasticity of demand is
The percentage change in quantity demanded that results from a 1% change in price
The cross price elasticity of demand is
The percentage change in the quantity demanded of one good in response to a 1% change in the price of another good
The cross price elasticity of demand for popcorn with respect to the price of butter is
The percentage change in the quantity of popcorn demanded in response to a 1% change in the price of butter
Total expenditure equals
Total revenue and PXQ
True or false; once people have acquired the food, shelter, and clothing required to maintain their health, Economic just refer primarily to the goods and services people want rather than those they need
True
If the price elasticity of demand for wine is a dollar than the demand for wine is
Unit elastic Because of Elasticity of demand equals one , Then demand is unit elastic with respect to price
Once people have achieved their substance levels of consumption, economics emphasize that we can talk mainly in terms of peoples
Wants
Suppose your cousin makes cutting boards that he sells on Etsy. Can he increase his total revenue by increasing the price of his cutting boards?
Yes, but only if the price elasticity of demand is less than one
If the price of lawnmowers goes up by 9% and the quantity of lawnmowers demanded falls by 5%, then the total expedeture on a lawnmower as will
Increase
