Econ 1101 chapter 5

Vertical

A demand curve that is perfectly inelastic is:

Can have both elastic and inelastic price elasticities of demand.

A linear demand curve:

Horizontal

A perfectly elastic supply curve is:

Vertical

A perfectly inelastic demand curve is:

The slope of the supply curve.

Determining the price elasticity of demand involves all of the following factors except:

Normal good

If your income increases and your consumption of bagels increases, other things equal, bagels are considered a(n):

If there are few or no substitutes available.

Other things being equal, the price elasticity of demand for a product will be lower:

Relatively high.

If a good is a luxury item that looms large in the household budget, then the price elasticity of demand will tend to be:

Less price elastic.

If a good is a necessity with few substitutes, then the price elasticity of demand will tend to be:

The quantity effect dominates the price effect, and a decrease in price causes total revenue to rise.

If demand is elastic:

Relatively price elastic

If someone did not regard health care as very important, often using home remedies and other substitutes, his or her demand curve for health care would most likely be ----- over the relevant range of prices for health care.

Negative; inferior good

If the income elasticity of demand for a good is----- the good is said to be a(n)------.

Price-inelastic

If the price elasticity of demand between two points on a demand curve is 0.75, then demand between those two points is:

29%

Suppose price is initially $20 but decreases to $15. The absolute value of the percentage change in price(using the midpoint method) is:

There are many close substitutes for strawberry ice cream.

The demand for strawberry ice cream tends to be relatively price elastic because:

Textbooks are a necessity

The demand for textbooks is price Inelasticity because:

Greater than 0

The income elasticity of demand of a normal good is:

The longer the relevant time.

The price elasticity of a good will tend to be greater:

Dividing the percentage change in quantity demanded by the percentage change in price.

The price elasticity of demand is measured by:

Quantity supplied divided by the percentage change in price.

The price elasticity of supply is computed as the percentage change in:

Production inputs are readily available at a relatively low cost.

The supply curve for a good will be more elastic if:

Substitutes; complements

This means the bitter and margarine are----- and water and lemons are-------.

Less than 0

To say that two goods are complements, their cross price elasticities of demand should be:

Greater than 0

To say that two goods are substitutes, their cross price elasticities of demand should be:

Inelastic

When the absolute value of the percentage change in quantity demanded is less than the absolute value of the percentage change in price, demand is:

Perfectly inelastic

Yovanka has diabetes, and she will pay any amount of money to buy the insulin she needs to stay alive. Yovankas price elasticity of demand for insulin is: