Econ Midterm hw two

Refer to the figure at right. Between points B and​ C, demand is

elastic, but not infinitely elastic.

Refer to the figure at right. The price elasticity of demand along this demand curve is equal to (straight vertical line)

zero

Which of the following represents the income elasticity of​ demand?

(change in Q/ change in I) X (I/Q)

What represents the price elasticity of demand?

(change in Q/change in P) X (P/Q)

The​ cross-price elasticity of demand for peanut butter with respect to the price of jelly is minus−0.3. If we expect the price of jelly to decline by​ 15%, what is the expected change in the quantity demanded for peanut​ butter?

+4.5%

Refer to the figure at right. Between two points near​ D, demand is

Unit elastic

If two goods are​ substitutes, the​ cross-price elasticity of demand must be

positive

Elasticity measures:

the percentage change in one variable in response to a one percent increase in another variable.

The income elasticity of demand refers to

the percentage change in quantity demanded resulting from a 1 percent increase in income.

Would you expect the price elasticity of demand for paper towels to be larger in the short run or in the long​ run? Why?

The price elasticity of demand for paper towels should be larger

For automobile demand in the United​ States, the income response tends to be larger in the

short run

If a 5% percent increase in the price of corn flakes causes a 10% percent decline in the quantity​ demanded, what is the elasticity of​ demand?

-2.00

Refer to the figure at right. If close substitutes are difficult to find in the short​ run, which of the demand curves in the figure best represents market demand in the short​ run?

D1

Which of the following statements about the demand curve in the figure at right is​ true?

Demand becomes more inelastic as price declines

Which of the following best describes the demand curve in the figure at​ right? (straight line vertical)

Demand is completely inelastic.

Which of the following best describes the demand curve in the figure at​ right? (straight line across)

Demand is infinitely elastic.

Would you expect the price elasticity of demand for televisions to be larger in the short run or in the long​ run? Why?

in the short run because televisions are durable

Refer to the figure at right. At point​ A, demand is

infinitely elastic.

Why do​ long-run elasticities of demand differ from​ short-run elasticities?

it may take time for addition substitutes to become available and it may take time for people to change their consumption habits

The​ cross-price elasticity of demand refers to

the percentage change in the quantity demanded of one good resulting from a 1 percent increase in the price of another good.

Refer to the figure at right. Between points E and​ F, demand is

​inelastic, but not completely inelastic.