Elasticity Flashcardzeroo

Front

If the price of sushi drops from $8 to $4 and sales rise from 20 to 40 orders, what is the price elasticity of demand? (Use the midpoint formula!)

Back

The price elasticity of demand is calculated using the formula: \(E_d = \frac{\% \Delta Q}{\% \Delta P}\). Using the midpoint formula, we find that the elasticity is 2.

Front

If the elasticity of demand for a product equals 1.5, then an increase in the product price will cause total revenue to

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decrease

Front

The determinants of the price elasticity of demand for a specific good include all of the following EXCEPT: the ease with which resources can be shifted to and from the production of this good to other uses, the availability of substitutes, the time span involved, whether the good is a luxury or necessity

Back

the ease with which resources can be shifted to and from the production of this good to other uses

Front

Which of the following products would likely have an inelastic demand? A bottle of Coca-Cola, A meal at an expensive steak house, A submarine sandwich, Auto repair for your car

Back

Auto repair for your car

Front

For which of the following goods is demand probably MOST inelastic?
snake bite antidote, roast beef sandwiches, apple coring devices, kittens

Back

snake bite antidote

Front

A key determinant of the price elasticity of supply is: the slope of the demand curve, the ability of sellers to change the price of the good that they produce, the ability of sellers to change the amount of the good that they produce, how sensitive buyers are to changes in sellers' prices

Back

the ability of sellers to change the amount of the good that they produce

Front

When the price of kittens was $25 each, the pet shop sold 20 per month. When they raised the price to $35 each, they sold 14 per month. The price elasticity of demand for kittens is about..

Back

1.06

Front

A bakery is willing to supply 500 bagels per day at a price of $0.50 each. At a price of $0.80, the bakery would be willing to supply 1,100 bagels. Using the midpoint method, the elasticity of supply is about:

Back

1.63

Front

You work at a sandwich shop and you determine the prices. The business needs to increase its total revenue and your job could be cut if they don't. IF the demand for sandwiches is elastic, you ...

Back

should decrease the price of sandwiches

Front

The main reason for using the midpoint method to calculate an elasticity, is that it

Back

gives the same answer regardless of whether the price increases or decreases