Elasticity

Front

If a 10 percent increase in the price of a good leads to a 25 percent decrease in the quantity demanded of a good, demand is:

Back

Relatively elastic

Front

The price elasticity of supply for peanuts increased from 40 tons/week to 60 tons/week when the price increased from $4/ton to $5/ton. What is the elasticity? Options: Elastic, Inelastic, Unit Elastic, Perfectly Inelastic

Back

Elastic

Front

For an inferior good, an increase in consumer income will cause:

Back

The demand curve to shift left

Front

Based on the demand curve for good X, it can be determined that good X has:

Back

No substitutes

Front

A product is likely to have a price elasticity of demand that exceeds 1 when: Its price falls, It is a necessity, It has close substitutes, Consumers are not very responsive to changes in price

Back

It has close substitutes

Front

In which of the following cases would a firm's total revenue increase? Price increases and demand is elastic, Price decreases and supply is inelastic, Price decreases and demand is inelastic, Price decreases and demand is elastic

Back

Price decreases and demand is elastic

Front

A 10 percent decrease in the price of a Pepsi decreases the demand for a Coca-Cola by 50 percent. The cross price elasticity of demand between a Pepsi and Coca-Cola is:

Back

5, substitutes

Front

Assume the income elasticity of demand for good Z equals −5.0. Which of the following is true? An increase in income will lead to a decrease in demand. Good Z is a normal good. An increase in income will lead to an increase in demand. Good Z must have an inelastic demand.

Back

An increase in income will lead to a decrease in demand.

Front

If the price elasticity of demand for a product equals 1, as its price rises the:

Back

Total revenue does not change.

Front

A city's transit authority increases the price of subway and bus tickets from $1.25 to $1.50. If the demand for these tickets is price inelastic, how will the # of people riding buses & subways AND the city's revenues change?

Back

1) Decrease; 2) Increase