econ chapter 4

If the price elasticity of supply for dishwashers is 0.2, then if the price of dishwashers goes up by 8 percent, the quantity of dishwashers supplied will

go up by 1.6 percent

If the price elasticity of supply for gasoline is 1.6, then if the price of gas goes up by 1 percent, the quantity of gasoline supplied will

go up by 1.6 percent.

Which of the following goods has the highest price elasticity of demand?

gren peaes

The price elasticity of demand is

he percentage change in quantity demanded that results from a 1 percent change in price.

The cross-price elasticity of demand for snowboards with respect to the price of skis is

he percentage change in the quantity of snowboards demanded in response to a 1 percent change in the price of skis.

When a good has many close substitutes, the price elasticity of demand tends to be relatively _____.

high

If Sal's Pizzeria uses tomato sauce, dough and cheese to make both pizza and calzones, then the price elasticity of supply for pizza at Sal's is likely to be relatively _____.

high Reason: In general, the easier it is to shift inputs away from the production of one good towards another, the more responsive will be the quantity supplied to a change in price

he 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 Reason: Since there are more substitution possibilities for a given brand of ice cream than for ice cream in general, the elasticity of demand for a given brand of ice cream is likely to be higher than the elasticity of demand for ice cream in general.

If the demand for first-class airline tickets is inelastic with respect to price, then if the price of first-class airline tickets increases, then total expenditure will _____.

increase If demand is inelastic with respect to price, total expenditure will increase in response to a price increase

If the price of lawnmowers goes up by 9 percent and the quantity of lawnmowers demanded falls by 5 percent, then the total expenditure on lawnmowers will

increase. Reason: If the percentage increase in price is greater than the percentage decrease in quantity demanded, then total expenditure will increase.

as you up a slope.. the price elasticity of demand _____.

increases Reason: The elasticity of demand increases as you move upward along a straight-line demand curve.

formula for the price elasticity of demand?

P/Q x 1/slope

If demand is perfectly elastic with respect to price, then the price elasticity of demand is ____

infinate

If demand is perfectly elastic with respect to price, then the price elasticity of demand is _____.

infinate

f the quantity of Big Macs demanded decreases by 4 percent in response to an 8 percent decrease in the price of Whoppers, then the cross-price elasticity of demand for Big Macs with respect to the price of Whoppers is

o.5

If the price elasticity of demand is infinite, then demand is

perfectly elastic

The percentage change in quantity demanded that results from a 1 percent change in price is the

price elasticity of demand.

Given that there are only so many operations the world's top brain surgeon can perform every year, the price elasticity of supply for his or her services is likely to be Multiple choice question.

very low

If the quantity of spaghetti demanded decreases by 4 percent in response to an 12 percent increase in the price of pasta sauce, then the cross-price elasticity of demand for spaghetti with respect to the price of pasta sauce is:

-0.33

If the quantity supplied decreases by 2 percent in response to a 4 percent drop in prices, then the price elasticity of supply is:

0.5

if the quantity of Big Macs demanded decreases by 4 percent in response to an 8 percent decrease in the price of Whoppers, then the cross-price elasticity of demand for Big Macs with respect to the price of Whoppers is:

0.5

If the quantity of peanuts demanded increases by 6 percent in response to a 3 percent increase in the price of almonds, then the cross-price elasticity of demand for peanuts with respect to the price of almonds is:

2

if the quantity supplied decreases by 6 percent in response to a 2 percent drop in prices, then the price elasticity of supply is:

3

If the demand for economy-class airline tickets is elastic with respect to price, then if the price of economy-class airline tickets increases, then total expenditure will _____.

decrease

If the price of sofas goes up by 10 percent and the quantity of sofas demanded falls by 15 percent, then the total expenditure on sofas will

decrease If the percentage increase in price is less than the percentage decrease in quantity demanded, then total expenditure will decrease.

If the price of sofas goes up by 10 percent and the quantity of sofas demanded falls by 15 percent, then the total expenditure on sofas will

decrease. Reason: If the percentage increase in price is less than the percentage decrease in quantity demanded, then total expenditure will decrease

he percentage change in quantity supplied that results from a 1 percent change in price is the

elasticity of supply.

goods has the lowest price elasticity of demand?

food

If the price elasticity of supply for cotton is 1, then if the price of cotton goes down by 5 percent, the quantity of cotton supplied will

go down by 5 percent.

If the price elasticity of supply for tobacco is 5, then if the price of tobacco goes down by 1 percent, the quantity of tobacco supplied will

go down by 5 percent.

The income elasticity of demand for iPhones is

the percentage by which the quantity of iPhones demanded changes in response to a 1 percent change in income.

The income elasticity of demand for potatoes is

the percentage by which the quantity of potatoes demanded changes in response to a 1 percent change in income.

The elasticity of supply is:

the percentage change in quantity supplied in response to a 1 percent 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 percent 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 percent change in the price of butter.

The cross-price elasticity of demand for snowboards with respect to the price of skis is

the percentage change in the quantity of snowboards demanded in response to a 1 percent change in the price of skis.

Price × quantity equals _

total expendature

Total expenditure equals:

total revenue

Given that there are only so many people who can stand at the top of the Eiffel tower at any point in time, the price elasticity of supply for tickets to the Eiffel tower is likely to be

very low

f supply is perfectly inelastic with respect to price, then the price elasticity of supply is _____.

zero