Microeconomics Quiz #3
The table gives some data on the demand for food. Calculate the income elasticity of demand for food when the price of food is $20 a day. When the price of food is $20 a day, the income elasticity of demand for food is _______.
0.29
When the price of noodles rises by 100%, the quantity demanded of the noodles decreases by 50%. What's the price elasticity of demand for noodles?
0.50
if quantity demanded of music downloads increases by 30% when the price of a music download falls by 50%. What is the price elasticity of demand for music downloads? Based on the number I've calculated, the demand for music downloads it _______.
0.60; inelastic
Sam's fried chicken wants to increase the quantity of fried chicken it sells by 20%. Price elasticity of demand for friend chicken sold by Sam's fried chicken is 2.8. What is the % price cut that will achieve the firm's objective?
7.14 %
Which of the following statements is an example of elasticity of supply?
A 10% fall in the price of turkey with no other change decreases quantity supplied by 12%.
Which of the following statements illustrates income elasticity of demand?
A salary cut and no other changes has resulted in Mary buying less fast food.
The graph shows the demand curve for lipstick. Draw a point on the curve at a price at which demand is elastic. Draw a point on the curve at a price at which demand is inelastic. Draw a point on the curve at a price at which demand is unit elastic. Choose the statement that's correct:
Elasticity is reported as a negative number because a positive change in price brings a positive change in the quantity demanded.
Which of the following statements describes an elastic demand?
Mary's quantity demanded of milk decreased by 8 percent when the price of milk rose by 5 percent.
Choose the correct statement:
Total revenue from the sale of a good equals the price of the good multiplied by the quantity sold.
Which of the following statements describes a perfectly inelastic demand?
Walgreens does not find any change in the number of people buying chlorthalidone after a 7 percent rise in its price.
The demand for plums is unit elastic if _____.
a 5 percent rise in the price of plums results in a 5 percent decrease in the quantity of plums demanded
Price elasticity of demand _______.
and the slope of the demand curve are two different concepts
The demand for air travel between two cities doubles. The elasticity of the supply of air travel between these cities will _______.
become more elastic, the longer the time since demand doubled
When the price is $6 a unit, demand is perfectly elastic. (Draw the demand curve for this good.) When the quantity demanded is 9 million units a year, demand is perfectly inelastic. (Draw the demand curve for this good) When the price is $12 a unit, the quantity demanded is 3 million units a year, and demand is unit elastic. (Draw the demand curve for this good) When the percentage change in the quantity demanded equals the percentage change in price, the demand curve is _______.
curved toward the origin
Cassandra's demand for orange juice is price elastic. A severe frost destroys the Florida orange crop. Cassandra ______.
decreases the amount that she spends on orange juice
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; inelastic; elastic
A decrease in tuition fees will decrease your college's total revenue if the price elasticity of demand for college education is ______.
greater than 0 and less than 1
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 a ______ good.
inelastic; normal
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 _______.
negative
Rice and noodles are substitutes. The cross elasticity of demand for rice with respect to the price of noodles is _______.
positive
Draw a demand curve for chicken dinners. 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. Chicken dinners and beef dinners are _______.
substitutes
Draw a supply curve of lamps that shows that the elasticity of supply is 1 at every price. Make your supply curve touch at least one axis. Supply is perfectly inelastic and the supply curve is ______.
vertical when the quantity supplied is fixed regardless of the price
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
