Exam 1 Review: Quiz 4 Questions

When the price of gasoline falls by 10 ​percent, the quantity demanded of gasoline increases by 11 percent. What is the price elasticity of demand for gasoline​?

.1

Using the estimates of some​ real-world income elasticities of demand provided in your​ textbook, put the following goods and services in order of their income elasticity by numbering them 1 to 4. Assign number 1 to the good whose demand is most income elastic and number 4 to the goods whose demand is the least income elastic. Tobacco Foreign travel Telephone Restaurant meals

(3) Tobacco (1) Foreign travel (4) Telephone (2) Restaurant meals

If the quantity demanded of fried chicken increases by 22 percent when the price of fried chicken falls by 50 ​percent, what is the price elasticity of demand for fried chicken?

.04 Based on the number you've calculated, the demand for fried chicken is INELASTIC

The figure shows the supply curve of lead. Between points A and B, the elasticity of supply is _____, so the supply of lead is _____.

9/5; elastic

Choose the statement that is INCORRECT: A) Elasticity is the ratio of two percentage changes B) Elasticity is reported as a negative number because a positive change in price brings a positive change in the quantity demanded C) Elasticity is reported using is magnitude D) Elasticity is a units-free measure

B) Elasticity is reported as a negative number because a positive change in price brings a positive change in the quantity demanded

The demand for air travel between two cities doubles. The elasticity of the supply of air travel between these cities will​ _______. A) adjusts to become equal to the price elasticity of demand over time B) become less​ elastic, the longer the time since demand doubled C) become more​ elastic, the longer the time since demand doubled D) not change over time

C) become more​ elastic, the longer the time since demand doubled

​Cassandra's demand for orange juice is price elastic. A severe frost destroys much of the Florida orange crop. Cassandra​ ______. A) increases the amount that she spends on orange juice B) increases or decreases the amount that she spends on orange​ juice, depending on whether or not the grapefruit crop has also been affected C) decreases the amount that she spends on orange juice D) continues to spend the same amount on orange juice

C) decreases the amount that she spends on orange juice

Price elasticity of demand is all of the following EXCEPT​ _______. A. a​ units-free measure B) equal to the percentage change in quantity demanded divided by the percentage change in price C) equal to the slope of the demand curve D) a measure of the responsiveness of the quantity demanded of a good to a change in its​ price, when all other influences on​ buyers' plans remain the same

C) equal to the slope of the demand curve

Ski trips and ski jackets are complements. The cross elasticity of demand for ski trips with respect to the price of a ski jacket is​ _______. (+/-/0)

Negative

The table shows the demand schedule for peanuts. When the price of peanuts falls from $1.60 to $1.20 a packet, what is the change in total revenue? Over the price range of $1.20 to $1.60, the demand for peanuts is _____.

The change in total revenue is 400 dollars Elastic

The table shows the demand schedule for soda. When the price of a bottle of soda rises from $0.25 to $0.50, what is the price elasticity of demand for soda?

The price elasticity of demand for soda is 0.23

The closer the substitutes for a good or​ service, the more​ ______ is demand. The greater the proportion of income spent on a​ good, the more​ ______ is demand. The longer the time that has elapsed since a price change, the more _____ is demand

elastic; elastic; elastic

An advance in technology lowers the price of a laptop. If the demand for laptops is price inelastic, the quantity of laptops sold will _____ and total revenue will _____.

increase; fall

When Mohesha receives an increase in her pay check from​ $1,800 a month to​ $2,200 a​ month, she increases the quantity of hot chocolate that she buys from 19 cups a month to 21 cups a month. ​Mohesha's demand for hot chocolate is income​ ______. For​ Mohesha, hot chocolate is​ ______ good.

inelastic; a normal

Draw a demand curve for chicken dinners. Label it D1. Suppose the cross elasticity of demand for chicken dinners with respect to the price of a beef dinner is positive. Draw a demand curve for chicken dinners that shows the effect of a rise in the price of a beef dinner. Label it D2 Chicken dinners and beef dinners are _____.

substitutes