Terms in this set (87)True or False: The price elasticity of demand is the percent change in the quantity supplied divided by the percent change in the quantity demanded. This is _____. False True or False: If the demand for Big Macs is elastic and McDonald's increases the
price, total revenue collected by McDonald's on Big Macs will decrease. This is _____. True False True True or False: The cross-price elasticity between jelly and peanut butter is -2.0. Therefore, jelly and peanut butter are substitutes. This is _____. True False False True or False: When supply is perfectly inelastic, the quantity supplied changes by a large amount when price changes. This is _____. True False False If the percentage change in the quantity demanded is smaller than the percentage change in the price, then: demand is inelastic. demand is unit elastic. the elasticity of demand is variable. demand is elastic. demand is inelastic. If the Nerd Squad
computer repair company is in the elastic part of its demand curve, in order to increase total revenue it should: lower prices. not change prices. increase prices. decrease its costs. lower prices. If the cross-price elasticity between two goods is positive, the goods must
be: luxury goods. substitutes unrelated. complements substitutes True or False: Supply is perfectly inelastic when any price increase will cause the quantity supplied to change by a very large amount. This is _____. True False False ... ... The demand for salt is inelastic, so when the price decreases, total revenue decreases because the: price effect is stronger than the quantity effect. quantity effect is stronger than the price effect. quantity effect is equal to the price effect. quantity demanded decreases. price effect is stronger than the quantity effect. True or False: Supply of a good is inelastic if the elasticity of supply is less than one. This is _____. True False True True or False: If the income elasticity for aspirin is 0.2, aspirin is a luxury. This is _____. True False False The price elasticity of demand is the: percentage change in the price divided by the percentage change in the quantity demanded. percentage change in the quantity demanded divided by the percentage change in the price. change in the quantity divided by the change in the price. quantity demanded minus the quantity supplied. percentage change in the quantity demanded divided by the percentage change in the price. If the price of boats decreases by 10 percent and the quantity demanded of boats increases by 40 percent, demand is: inelastic. elastic. unit elastic. zero elastic. elastic. True or False: If the price of apples decreases and the demand for bananas decreases, apples and bananas must be complements. This is _____. True False False True or False: The price elasticity of supply is the ratio of the percentage change in the quantity supplied to the percentage change in quantity demanded. This is _____. True False False True or False: The price elasticity of demand is the ratio of the percentage change in the quantity demanded to the percentage change in the quantity supplied. This is _____. True False False If the price of a good increases, the price effect of each good being sold at a higher price: raises total revenue and the quantity effect of fewer units sold decreases total revenue. increases total revenue and the quantity effect of fewer units sold increases total revenue. decreases total revenue and the quantity effect of fewer units sold increases total revenue. decreases total revenue and the quantity effect of fewer units sold decreases total revenue. raises total revenue and the quantity effect of fewer units sold decreases total revenue. If the income elasticity is negative, the good is a(n): normal good. inferior good. substitute. complement. inferior good. True or False: Supply of a good is inelastic if the percentage change in quantity supplied is greater than the percentage change in price. This is _____. True False False The price elasticity of demand is the: percentage change in the price divided by the percentage change in the quantity demanded. percentage change in the quantity demanded divided by the percentage change in the price. change in the quantity divided by the change in the price. quantity demanded minus the quantity supplied. percentage change in the quantity demanded divided by the percentage change in the price. The demand for gasoline is inelastic, so when the price increases, total revenue increases because the: quantity effect is equal to the price effect. price effect is stronger than the quantity effect. quantity effect is stronger than the price effect. quantity demanded increases. price effect is stronger than the quantity effect. Supply is perfectly elastic when: any price change will cause the quantity supplied to change by a very large amount. the quantity supplied responds only slightly to a change in price. when the price elasticity is zero. the supply curve is vertical. any price change will cause the quantity supplied to change by a very large amount. If the price of the textbook required for an economics class increases from $100 to $120 and the students still buy the same number of books, demand is:. perfectly inelastic. elastic. perfectly elastic. unit elastic. perfectly inelastic. When income increases by 3 percent, meals sold at fast food restaurants decreases by 6 percent. Using one decimal place and the negative sign if necessary, the income elasticity of fast food meals is _____. -2.0 The graph shows the demand for bicycles. True or False: The price elasticity of demand between $250 and $200 is 0.82, so this means that any change in price will change quantity demanded by a smaller percentage. This is _____. True If the Nerd Squad computer repair company is in the inelastic part of its demand curve, in order to increase total revenue it should: not change prices. increase prices. lower prices. decrease its costs. increase prices. If goods are substitutes, the cross-price elasticity will be: negative. positive. zero. impossible to measure. positive. Which elasticity number indicates an inelastic supply? The elasticity of supply of cardboard is 1.55. The elasticity of supply of satin is 1.35. The elasticity of supply of toothbrushes is 1.45. The elasticity of supply of linen is 0.77. The elasticity of supply of linen is 0.77. The table shows the demand for jeans. Using two decimal places, the absolute value of price elasticity of demand between $100 and $120 is _____. 3.72 True
or False: If the demand for season football tickets is 0.3, to increase total revenue the university should increase the price of tickets. This is _____. True False True The amount of jelly sold decreases from 100 jars to 50 jars when the price of peanut butter increases from $2 to $3. Using the midpoint method, the cross-price elasticity between peanut butter and jelly is _____. 1.5 [[The percent change in quantity demanded is [(50 - 100)/(100 + 50)/2 ] x 100= -67 percent. The percent change in price is [($3 - $2)/($3 + $2)/2] x 100 = 40 percent. -1.357 -1.675 1.7 -1.675 Which elasticity number indicates an elastic supply? The elasticity of supply of quilts is 1.40. The elasticity of supply of violins is 0.89. The elasticity of supply of guitars is 0.44. The elasticity of supply of snowboards is 0.65. The elasticity of supply of quilts is 1.40. If the price of a trip to Las Vegas increases by 10 percent and the quantity demanded of Las Vegas trips decreases by 25 percent, the price elasticity of demand is: 0.15. 0.35. 2.5. 0.4. 2.5. When demand is inelastic and the price increases, total revenue: stays the same. increases. decreases. is indeterminate. increases. Which elasticity number indicates an elastic supply? The elasticity of supply of tents is 0.53. The elasticity of supply of flashlights is 0.75. The elasticity of supply of sleeping bags is 1.22. The elasticity of supply of lanterns is 0.31. The elasticity of supply of sleeping bags is 1.22. The table shows the demand for jeans. The price elasticity of demand between $20 and $40 is: 0.67. 1. 0.27. 3.72. 0.27. When demand is unit elastic and the price increases, total revenue: stays the same. increases. decreases. decreases to zero. stays the same. True or False: If the elasticity of supply of bicycles is 1.75, supply is elastic. This is _____. True False True The toll to cross the Golden Gate Bridge increased by 20 percent and rides on the ferry to cross San Francisco Bay increased by 60 percent. The cross-price elasticity between crossing the Golden Gate Bridge and riding the ferry is _____ and the bridge and the ferry are _____.. 40 percent; substitutes 3; substitutes 0.33; complements -3; complements 3; substitutes Suppose that when the price of a movie ticket is $4, 100 people attend the matinee. If the price is increased to $5, suppose that only 50 people attend the matinee. Using the midpoint method in numeral form, the absolute value of the price elasticity of demand is _____. 3 If the price of strawberries decreases by 10 percent and consumers buy 10 percent more strawberries, the demand for strawberries is: inelastic. perfectly inelastic. unit elastic. perfectly elastic. unit elastic. If the income elasticity for computers is 1.2, and incomes increase by 10 percent, the demand for computers, using one decimal place and the negative sign if necessary, will increase by _____ percent. 12.0 When the price of bicycles is $300, six bicycles are supplied. When the price increases to $400, ten bicycles are supplied. Using the midpoint method, two decimal places, and the negative sign if necessary, the price elasticity of supply is _____. 1.75 If the price of gasoline increases by 20 percent and the quantity demanded of gasoline decreases by 5 percent, the price elasticity of demand is: 0.25. -0.15. 4. 1.0. 0.25. The demand for airplane tickets for vacation travel is elastic, so when the price decreases, total revenue increases because: the price effect is stronger than the quantity effect. there is no quantity effect. the quantity effect is stronger than the price effect. the quantity effect is equal to the price effect. the quantity effect is stronger than the price effect. The price of peanut butter increased by 25 percent and the quantity of jelly demanded decreased by 50 percent. Using one decimal place and the negative sign if necessary, the cross-price elasticity between peanut butter and jelly is _____. -2.0 If the price of corn increases by 50 percent and the quantity supplied increases by 10 percent, then the: the elasticity of supply is 5 percent. supply is inelastic. supply is elastic supply is unit elastic. supply is inelastic. The bookstore sells 200 economics textbooks when the price is $55. If it has a sale and reduces the price to $45, it sells 220 textbooks. Using the midpoint method and two decimal places, the absolute value of the price elasticity of demand for economics texts between $45 and $55 is _____. 0.48 If the income elasticity for breakfast cereal is 0.6 , and incomes increase by 10 percent, the demand for breakfast cereal will _____ by _____ percent. decrease; 12 increase; 6 increase; 12 decrease; 6 increase; 6 If the price of corn increases by 50 percent and the quantity supplied increases by 10 percent, then the price elasticity of supply, using one decimal place and the negative sign if necessary, is _____. .2 The graph shows the demand for bicycles. True or False: The price elasticity of demand between $150 and $100 is 0.33, so the demand for bicycles in the range between $100 and $150 is not downward-sloping. This is _____. False The price elasticity of demand for chocolate chip cookies is likely to be _____, while the price elasticity of demand for arthritis medicine is likely to be _____. inelastic; inelastic elastic; inelastic inelastic; elastic elastic; elastic elastic; inelastic Which of the following pairs of goods are most likely to have a negative cross-price elasticity? bicycles and bicycle helmets butter and margarine apples and bananas rice and potatoes bicycles and bicycle helmets Which elasticity number indicates an elastic supply? The elasticity of supply of tents is 0.53. The elasticity of supply of flashlights is 0.75. The elasticity of supply of sleeping bags is 1.22. The elasticity of supply of lanterns is 0.31. The elasticity of supply of sleeping bags is 1.22. The table shows the demand for jeans. The price elasticity of demand between $60 and $40 is: 0.22. 1.82. 1. 0.55. 0.55. The figure shows the demand curve for bicycles. If the price decreases from $400 to $350, total revenue changes from $_____ to $_____, which means that demand is _____ in this price range. 10,500; 18,000; elastic 8000; 10,000; inelastic 10,000; 8500; elastic 8000; 10,500; elastic 8000; 10,500; elastic If the price of gasoline increases by 20 percent and the quantity supplied increases by 30 percent, then the: supply is elastic. supply is inelastic. the elasticity of supply is 50 percent. supply is unit elastic. supply is elastic. The table shows the demand for jeans. True or False: The price elasticity of demand between $20 and $40 is 0.27, so the demand for jeans in the range between $20 and $40 is elastic. This is _____. False Along a linear demand curve, demand is: inelastic at high prices and elastic at low prices unit elastic at all points. relatively more elastic at lower prices than at higher prices. relatively less elastic at lower prices than at higher prices. relatively less elastic at lower prices than at higher prices. After Sally's income increased from $12,000 to $16,000 per year, her purchases of CDs increased from 40 to 60 per year. Using the midpoint method, one decimal place, and the negative sign if necessary, her income elasticity for CDs is _____. 1.4 Fifteen hundred iPads were supplied when the price was $500, and 1600 were supplied when the price was $600. Using the midpoint method, two decimal places, and the negative sign if necessary, the price elasticity of supply for iPads is _____. 0.36 If the price of a trip to Las Vegas increases by 10 percent and the quantity demanded of Las Vegas trips decreases by 25 percent, the price elasticity of demand is: 0.15. 0.35. 2.5. 0.4. 2.5. The price elasticity of demand for restaurant meals is likely to be: inelastic. unit elastic. elastic. perfectly inelastic. elastic. If the price of golf clubs increases by 10 percent and the quantity of golf balls demanded decreases by 25 percent, then the cross-price elasticity, using one decimal place and the negative sign if necessary, between golf clubs and golf balls is _____. -2.5 If the price of corn increases by 50 percent and the quantity supplied increases by 10 percent, then the: the elasticity of supply is 5 percent. supply is inelastic. supply is elastic supply is unit elastic. supply is inelastic. The graph shows the demand for bicycles. The price elasticity of demand between $350 and $300 is 1.86. This means that: a 1.86 percent change in price causes a 1percent change in quantity demanded. a 1 percent change in price causes a 1.86 percent change in quantity demanded. a 1 percent change in price causes an 18 percent change in quantity demanded. a 1 percent change in price causes a 6 percent change in quantity demanded. a 1 percent change in price causes a 1.86 percent change in quantity demanded. Coke and Pepsi are considered to be substitutes by many consumers. Therefore, their cross-price elasticity should be: positive. impossible to determine. negative. zero. positive. The graph shows the demand for bicycles. Along a linear demand curve, demand is: relatively more elastic at lower prices than at higher prices. unit elastic at all points. inelastic at high prices and elastic at low prices. unit elastic at the midpoint of the demand curve. unit elastic at the midpoint of the demand curve.
If the income elasticity for breakfast cereal is 0.6 , and incomes increase by 10 percent, the demand for breakfast cereal will _____ by _____ percent. decrease; 12 increase; 6 increase; 12 decrease; 6 increase; 6 The price of aspirin recently decreased by 10 percent. If the price elasticity of supply of aspirin is 0.4, the quantity supplied will _____ by _____ percent. decrease; 4 decrease; 10 increase; 10 decrease; 0.4 decrease; 4 The table shows the demand for jeans. The price elasticity of demand between $60 and $80 is: 1.33. 0.29. 1.0. 0.75. 1.0. If the price elasticity of aspirin is 0.4 and the price increases by 60 percent, the quantity demanded decreases by _____ percent. 24 The price elasticity of demand for cigarettes is likely to be: elastic. perfectly elastic. inelastic. unit elastic. inelastic. Last year Stephen purchased 60 pounds of potatoes to feed his family of four when his income was $30,000. This year his income fell to
$20,000, and he purchased 70 pounds of potatoes. -0.4 If the price elasticity of demand for tennis rackets is 2, then a 10 percent increase in the price of tennis rackets will result in a: 5 percent increase in the quantity demanded. 20 percent increase in the quantity demanded. 20 percent decrease in the quantity demanded. 5 percent decrease in the quantity demanded. 20 percent decrease in the quantity demanded. The figure shows the demand curve for bicycles. If the price increases from $300 to $350, total revenue changes from $_____ to $_____, which means that demand is _____ in this price range. 12,500; 8000; inelastic 12,000; 10,500; elastic 12,500; 10,000; inelastic 10,000; 13,500; inelastic 12,000; 10,500; elastic The transportation department needs to increase its revenue so it increases the toll on the toll road to the beach. Total revenue will increase if demand is _____. elastic inelastic unit elastic perfectly elastic inelastic The demand for movie tickets is elastic, so when the price increases, total revenue: decreases because the quantity effect is stronger than the price effect. increases because the price effect is stronger than the quantity effect. is constant because the quantity effect is equal to the price effect. increases by an infinite amount. decreases because the quantity effect is stronger than the price effect.
If the price of golf clubs increases by 10 percent and the cross-price elasticity between golf clubs and golf balls is -3, then the demand for golf balls will _____ by _____ percent. increase; 20 decrease; 15 decrease; 30 increase; 10 decrease; 30 The figure shows the demand curve for bicycles. Increasing the price from $150 to $200 will change total revenue from $_____ to $_____, which means that demand is _____ in this price range. 10,500; 12,000; inelastic 10,000; 12,500; inelastic 12,500; 10,000; elastic 10,000; 12,000; elastic 10,500; 12,000; inelastic The price of gasoline increased by 30 percent and the quantity of large SUVs demanded decreased by 45 percent. Using one decimal place and the negative sign if necessary, the cross-price elasticity between gasoline and large SUVs is _____. -1.5 Suppose that the price elasticity of demand for Elton John concert tickets is 1.6 for students and 0.7 for their parents. If Elton John wants to increase revenue, he should: raise prices for both groups. lower prices for students and raise prices for their parents. lower prices for both groups. raise prices for students and lower prices for their parents. lower prices for students and raise prices for their parents. Suppose that the cross-price elasticity between Honda Civics and Toyota Camrys is 2.0. If Honda increases the price of a Civic by 10 percent, Toyota will sell: 10 percent more Camrys. 5 percent more Camrys. 10 percent fewer Camrys. 20 percent more Camrys. 20 percent more Camrys. If the income elasticity for food is 0.6 and income decreases by 5 percent, the demand for food will _____ by _____ percent. decrease; 5.6 increase; 3 decrease; 3 increase; 5.6 decrease; 3 Which of the following pairs of goods are most likely to have a positive cross-price elasticity? bicycles and bicycle helmets butter and margarine peanut butter and jelly golf balls and golf clubs butter and margarine ... ... Sets with similar termsTest 3 ECO 20230 terms DADDYSBACK Chapter 3 and 633 terms cheyenne_bigler Micro Chapter 2059 terms 913123 agons chapter 549 terms killercatnipbee Sets found in the same folderChapter 6: Elasticity90 terms Em_Vlld Principles ofEconomicsII Model 10:41 terms salome_roberts exam 2 ch 620 terms cynthiaodens Econ ~ Ch. 414 terms ACG169 Other sets by this creatorHomework Chap 19 (Monopsony)3 terms ThatAsianGuy97 Graded Homework - Chapter 1719 terms ThatAsianGuy97 LearningCurve - Chapter 17: Public Goods and Commo…56 terms ThatAsianGuy97 Graded Homework - Chapter 1920 terms ThatAsianGuy97 Verified questions
ECONOMICS Loaded-Up Fund charges a 12b-1 fee of 1% and maintains an expense ratio of .75%. Economy Fund charges a front-end load of 2%, but has no 12b-1 fee and an expense ratio of .25%. Assume the rate of return on both funds’ portfolios (before any fees) is 6% per year. How much will an investment in each fund grow to after: 1 year? Verified answer
ECONOMICS The United States Postal Service reports 95 percent of first class mail within the same city is delivered within two days of the time of mailing. Six letters are randomly sent to different locations.a. What is the probability that all six arrive within two days? b. What is the probability that exactly five arrive within two days? c. Find the mean number of letters that will arrive within two days. d. Compute the variance and standard deviation of the number that will arrive within two days. Verified answer
QUESTION Decreases in the stock market decrease aggregate demand by decreasing which of the following? A. consumer wealth B. the price level C. the stock of existing physical capital D. interest rates E. tax revenues Verified answer
ECONOMICS In a 1973 magazine interview, Milton Friedman said, "What kind of society isn't structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system." Do you agree with Friedman that societies are structured on greed and that capitalism can reduce the harm caused by greed? Explain your answer. Verified answer Recommended textbook solutions Fundamentals of Engineering Economic Analysis1st EditionDavid Besanko, Mark Shanley, Scott Schaefer 215 solutions
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Essentials of Investments9th EditionAlan J. Marcus, Alex Kane, Zvi Bodie 689 solutions Other Quizlet setsChapter 15: Pre-test54 terms barkley_browder6 Clothes41 terms quizlette496550 MGMT 402 Midterm107 terms byron_violante8 prf/819 terms quizlette53762968 Related questionsQUESTION The amount of a commodity that buyers in the market would like to purchase at a particular price is 6 answers QUESTION demand is inelastic if quantity demanded is relatively 3 answers QUESTION If average revenue is greater than variable cost, 2 answers QUESTION Supply curve is coincident with its marginal cost curve 3 answers Why is electricity supply inelastic?Electricity is inelastic because it doesn't have any close substitutes.
Why is price elasticity of demand inelastic?An inelastic demand is one in which the change in quantity demanded due to a change in price is small. If the formula creates an absolute value greater than 1, the demand is elastic. In other words, quantity changes faster than price. If the value is less than 1, demand is inelastic.
Is demand for electricity perfectly inelastic?Electricity is inelastic because it does not have any close substitutes. For examples, petrol and salt. Firms with monopoly power will face an inelastic demand curve.
Is electricity an inelastic good?Electricity demand is highly price and income inelastic in the short run. The long-run price elasticity of industrial electricity use is between −0.75 and −1.01.
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Why is the price elasticity of demand for retail electricity very inelastic? quizlet
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