ECON 251 - Learning Curve 5
If cutting the price of milk by 20% leads to an increase in the quantity demanded by 10%, what is the absolute value of the price elasticity of demand for milk?
0.5
When Uber increased prices by 80% for a certain place and specific time it led to a 100% increase in Uber drivers supplying rides. Using the percent change in the price and the percent change in the quantity supplied, what is the price elasticity of supply for Uber rides?
1.25
When the government increased the minimum wage by 50%, it led to a 75% increase in workers providing labor. Based on the information given, what is the price elasticity of supply for labor?
1.50
If your customers are less responsive to price changes, that is, if their demand is ___, then a price rise will lead to ___ in quantity.
inelastic; a small decline
We measure the income elasticity of demand as the ratio of the percent change in ___ to the percent change in ___.
quantity demanded; income
If the price of tacos rises by 30%, and the quantity supplied rises by 3%, what is the price elasticity of supply of tacos?
0.1
If increasing the price of watches by 6% leads to a decrease in the quantity demanded by 15%. what is the absolute value of the price elasticity of demand for watches?
2.5
If the price of a monthly parking permit changed from $100 to $200, using the midpoint formula, what is the percentage change in price?
67%
Which of the following has the lowest value of the price elasticity of demand? A) Cake B) Restaurant meals C) Rice and Pasta D) Fish
Rice and Pasta
E-books are highly price-elastic For every 1 copy of an e-book sold at $16.00, 1.75 copies would have been purchased if the price had been $10.00. If customers would buy 10,000 copies of a particular e-book when priced at $16.00, which price point produces lower revenue?
The $16.00 price point yields $15,000 less in revenue that at $10.00.
E-books are highly price-elastic. For every copy of an e-book sold at $14.99, it would sell 74% more if priced at $9.99. If customers buy 100,000 copies of a particular e-book when priced at $14.99, which price gives higher revenue?
The $9.99 price point yields $239,260 more in revenue than at $14.99.
___ is the total amount you receive from buyers, which is calculated as price times quantity.
Total revenue
The cross-price elasticity is ___ for substitutes
positive
The price elasticity of demand for rice, pasta, and/or eggs is ___.
very inelastic
Easily available variable inputs make supply ___.
elastic
If the price of windmills rises by 20%, and the quantity supplied rises by 2%, what is the price elasticity of supply of windmills?
0.1
If increasing the price of solar panels by 20% leads to a decrease in the quantity demanded by 10%, what is the absolute value of the price elasticity of demand for solar panels?
0.5
Calculate the absolute value of the price elasticity of demand if the percentage change in price is 45% and the percentage change in quantity is -27%.
0.6
If the average income in the United States rises by 5%, then housing expenditures by homeowners increase by 3%. Based on this information, what is the income elasticity of demand for housing?
0.6
On weeknights an Uber driver can expect to earn $110 driving a six-hour shift. Surge pricing on Saturday nights mean that Uber drivers can expect to earn $140 driving a six-hour shift. On weeknights, there are 200 drivers on the road, which rises to 300 on Saturdays. Calculate the price elasticity of supply of Uber drivers using the midpoint formula.
1.67
A ___ absolute value of the price elasticity of supply means that the quantity is more responsive to ___ changes.
bigger; price
The cross-price elasticity is negative for goods that are ___.
complements
The cross-priced elasticity of demand measures by what percent the quantity ___ following a 1% increase in the price of another good.
demanded will rise
If your customers are very responsive to price changes, that is, if their demand is ___, then a modest price rise will lead to ___ in quantity.
elastic; a large decline
Calculate the absolute value of the price elasticity of demand if the percentage change in price is 67% and the percentage change in quantity is -55%
0.8
An elastic demand curve is ___, while an inelastic demand curve is ___.
relatively flat; relatively steep
The availability of ___ determines the price elasticity of ___.
substitutes; demand