Micro 6

The income elasticity for peanut butter is -3. This defines peanut butter as what type of good?

an inferior good

When you compute a price elasticity of demand the answer is always

negative

If the supply of good B is perfectly elastic in price falls the quantity supplied will

fall to zero

Prior to the 1997 federal tobacco settlement A pack of cigarettes sold for $2.48. The terms of the settlement required a decrease in teenage smoking of 60%. If the elasticity of cigarette demand for teenagers is about 1.3 then the price of cigarettes should rise to__________ in order to achieve the target reduction of 60%.

$3.62

If a 20% increase in the price of red bull energy drinks results in a decrease of the quantity demanded by 25%, the price elasticity of demand is

-1.25

The current price of wheat is one dollar per bushel and the price of elasticity of demand for wheat is known to be 0.5. A bad harvest causes the supply of wheat to decrease and as a result the price of wheat rises by 20%. What will be the percentage change in the quantity demanded for weeds and will farm revenues rise or fall?

10%, rise

Using the initial value formula, the value of the price elasticity of supply between points S & T equals

2.0

If the income elasticity of SUVs is greater than one, what is the good considered?

A luxury

The more substitutes that exist for a particular product The______ the price elasticity of demand

Greater

An increase in the price of a substitute for iPads will lead to _____ in the quantity demanded of iPads so the cross price elasticity of demand will be______.

An increase, positive

If the Cross price elasticity of demand between two products is -3, then the two products are

Compliments

Personal computers and computer display monitors are

Complements

If a 20% increase in the price of red bull energy drinks results in a decrease in quantity demanded of 25%, we say the demand for Redbull is_______ in this range.

Elastic

Perfectly inelastic curve is

Indicate the quantity supplied does not respond to a change in price

At current prices of a highly addictive drug the demand for the drug is highly price

Inelastic

The disappearance of the family farm can be partially attributed to the fact that the elasticity of demand for wheat is_________, whole at the same time, the income elasticity for wheat is_____.

Inelastic, low

Along a linear demand curve the slope_____ while the price elasticity of demand______

Is constant, changes from one point to another

Economist avoid confusion over units in the computation of elasticity by using

Percentage changes

The _________ Is a measure of responsiveness to the change in quantity demanded of a good to the change in its price

Price elasticity of demand

What is the cross price elasticity of demand for two good that are unrelated

Zero

If the price elasticity of supply is 0.4, then a 20% increase in price will_____ the quantity supplied by_____%

increase 8.0

Which of the following goods is probably the most highly income elastic?

private education

If prices rise the quantity supplied will be greater

the longer the time that elapses