ECON101 Exam 2

is constant, changes from one point to another

Along a linear demand curve, the slope __________ while the price elasticity of demand __________.

an increase, positive

An increase in the price of a substitute for iPads will lead to __________ in the quantity demanded of iPads so the cross-price elasticity of demand will be __________.

percentage changes

Economists avoid confusion over units in the computation of elasticity by using:

the longer the time elapses

If prices rise the quantity supplied will be greater:

increase, 8.0

If the price elasticity of supply is 0.4, then a 20% increase in price will __________ the quantity supplied by __________ %.

fall to zero

If the supply of Good B is perfectly elastic and price falls the quantity supplied will:

cap-and- trade

One idea often floated in the United States as a legislative response to global climate change is __________.

complements

Personal computers and computer display monitors are:

transaction costs

The costs associated with engaging in a process to solve a particular pollution problem are referred to as:

inelastic, low

The disappearance of the family farm can be partially attributed to the fact that the elasticity of demand for wheat is __________, while at the same time, the income elasticity for wheat is __________.

An inferior good

The income elasticity for peanut butter is -3. This defines peanut butter as what type of good?

zero

What is the cross-price elasticity of demand for two goods that are unrelated?