micro 5, 6, 7

If demand is price inelastic, then

buyers do not respond much to a change in price.

Goods with many close substitutes tend to have

more elastic demands.

When the price of a good is $5, the quantity demanded is 100 units per month; when the price is $7, the quantity demanded is 80 units per month. Using the midpoint method, the price elasticity of demand is about

0.67.

At a price of $1.20, a local coffee shop is willing to supply 100 cinnamon rolls per day. At a price of $1.40, the coffee shop would be willing to supply 150 cinnamon rolls per day. Using the midpoint method, the price elasticity of supply is about

2.60

If the price elasticity of demand for a good is 1.2, then a 3 percent decrease in price results in a

3.6 percent increase in the quantity demanded.

Which of the following is consistent with the elasticities given in Table 5-1?

A is a luxury and B is a necessity

When demand is elastic, a decrease in price will cause

an increase in total revenue.

Which of the following is likely to have the most price inelastic demand?

athletic shoes

Demand is said to be price elastic if

buyers respond substantially to changes in the price of the good.

Suppose an airline determines that its customers traveling for business have inelastic demand and its customers traveling for vacations have an elastic demand. If the airline's objective is to increase total revenue, it should

decrease the price charged to vacationers and increase the price charged to business travelers.

When small changes in price lead to infinite changes in quantity demanded, demand is perfectly

elastic, and the demand curve will be horizontal.

If the price of milk rises, when is the price elasticity of demand likely to be the lowest?

immediately after the price increase

An increase in price causes an increase in total revenue when demand is

inelastic

When the price of candy bars is $1.00, the quantity demanded is 500 per day. When the price falls to $0.80, the quantity demanded increases to 600. Given this information and using the midpoint method, we know that the demand for candy bars is

inelastic.

The supply of a good will be more elastic, the

longer the time period being considered.

Frequently, in the short run, the quantity supplied of a good is

not very responsive to price changes.

Which of the following is likely to have the most price inelastic demand?

prescription medicine

The price elasticity of demand measures how much

quantity demanded responds to a change in price.

For a good that is a luxury, demand

tends to be elastic.

For a good that is a necessity, demand

tends to be inelastic.

The demand for Godiva mint chocolates is likely quite elastic because

there are many close substitutes, this particular type of chocolate is viewed as a luxury by many chocolate lovers, the market is narrowly defined.