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Terms in this set (37)
When the price of a good increased by 5 percent, the quantity demanded of it decreased 10 percent.
Demand for this good is ______.
elastic
When the price of a good increased by 6 percent, the quantity demanded of it decreased 3 percent.
Most
likely, this good ______ and ______.
necessity; poor substitute
When the price of a good increased by 8 percent, the quantity demanded of it decreased 4 percent.
The price elasticity of demand is ______. A price rise will ______ total revenue.
An example of a good with such a demand is _______.
0.5 increase, bread
Samsung
and LG slash prices to take sales from Apple
Apple's new iPhone 6 sold out quickly in the United States and to avoid the same outcome in other national markets, Samsung and LG cut the prices of their Galaxy and V10 smartphones by over 10 percent.
If only Samsung and LG cut their price, their total revenue will _______.
If at the same time Apple also cuts its price, the total revenue from all smartphone sales will _______.
increase; decrease
One winter recently, the price of home heating oil increased by 20 percent and the quantity demanded decreased by 2 percent.
Use the total revenue test to determine whether the demand for home heating oil is elastic or inelastic.
Total revenue ______ because the percentage increase in the price is ______ than the percentage decrease in the quantity demanded.
increases;greater,
Because total
revenue and the price change in _________, the demand for home heating oil is ______. same direction, inleastic
The graph illustrates the demand for movie tickets.
The demand for movie tickets is elastic over the price range $7 to $9.
true,
If the price of a movie ticket falls from $9 to $7, total revenue ______.
increases because demand is elastic
Calculate the price elasticity of demand
for movie tickets when the price is $8 a ticket, The price elasticity of demand is 4
The price elasticity of demand for Loretta's chocolate chip cookies is 0.6. Loretta wants to increase her total revenue.
Loretta should _____ the price of her chocolate chip cookies because the demand for chocolate chip cookies is ______.
raise; inelastic
Mike should _____ the price of his popcorn because the demand for popcorn is ______.
lower; elastic
**Read Eye on Elasticity At The Coffee Shop, then explain why the demand for latte is inelastic while the demand for a Starbucks latte is elastic.
Explain why the demand for latte is inelastic while the demand for a Starbucks latte is elastic.
Which demand is likely to be more inelastic: the demand for latte or the demand
for coffee?
The demand for latte is inelastic while the demand for a Starbucks latte is elastic because _______.
a Starbucks latte has many substitutes such as lattes from other coffee shops, but latte in general has poor substitutes
The demand for _______ is likely to be more inelastic than _______.
coffee; latte because a latte has more substitutes than coffee
Which of the following is an example of price elasticity of demand?
When the price of bananas increased by 5 percent and nothing else changed, the quantity of bananas demanded decreased by 2 percent.
Which of the following statements describes an elastic demand?
Mary's quantity demanded of milk decreased by 8 percent when the price of milk rose by 5 percent.
The demand for plums is unit elastic if _____.
a 5 percent rise in the price of plums results in a 5 percent decrease in the quantity of plums demanded
Which of the following statements describe an inelastic demand?
Megan did not buy too many hockey tickets even though their price dropped by 10 percent.
Which of the following statements is an example of perfectly elastic demand?
Sherry is overwhelmed with buyers of her peaches when she lowers their price by a penny a pound compared to other sellers in the farmers' market.
Which of the following statements describes a perfectly inelastic demand?
Walgreens does not find any change in the number of people buying chlorthalidone after a 7 percent rise in its price.
When the price of tomatoes rises from $3 per pound to $4 per pound, the quantity of tomatoes sold decreases from 15 pounds to 10 pounds. Total revenue _____, and using the total revenue test, we can determine that the demand for tomatoes is _____ .
decreases from $45 to $40; elastic
A 3 percent increase in the price of a good increased
the quantity supplied of the good by 6 percent after one month.
Supply of this good is ______. The good is most likely produced using factors of production that are _______.
elastic, plentiful or easily obtained
price of elasticity of good is 2.0
A 8 percent increase in the price of a good increased the quantity supplied of the good by 4 percent after one month
and 24 percent after one year.
After
one year, supply has become _______ elastic, which could be due to _______ factors being allocated to the production of the good.
more;more
3.0
Enrolment increased from 15,539,000 in 2000 to 20,618,000 in 2013. The net cost of college (average for all types) increased from $12,357 to $14,860.
1.53 elastic
Which of the following statements is an example of price elasticity of supply?
A 10 percent fall in the price of turkey with no other change decreases quantity supplied by 12 percent.
Which of the following statements describes an elastic supply?
A rise in the price of tomatoes by 10 percent increases the quantity supplied by more than that.
Which of the following illustrates a unit elastic supply?
Dan says that a 10 percent rise in the price of movie tickets increases the quantity of movie tickets supplied by the same proportion.
Which of the following statements illustrates an inelastic supply?
Farmers have not been able to respond to a rise in the price of peas.
Which of the following statements describes perfectly elastic supply?
the demand for pears increases by 800 percent, but Kroger continues to sell them at an unchanged price.
Which of the following statements is an example of perfectly inelastic supply?
When the price of insulin falls by 10 percent, Rite Aid pharmacy continues to supply the same quantity.
The quantity demanded of good A decreases by 5 percent when the price of good B rises by 10 percent and other things remaining the same.
The cross elasticity of demand of good A with respect to good B is negative 0.5.
The cross elasticity of demand tells us that good A and good B are ______ and as the price of good B rises, the demand for good A ______.
complements; decreases
When
income rises by 2 percent and other things remain the same, the quantity demanded of good C increases by
3 percent.
Good C is ______ good and as income rises, the demand for good C ______.
normal; increases
1.5
China is the world's fastest-growing market for "vanity" spending
China's market for the consumption of goods aimed at enhancing one's appearance or status grew an average of 15.6
percent a year for the past five years.
Given the information that incomes grew at about 7 percent a year, is the demand for "vanity" goods in China income elastic or income inelastic? Explain.
The demand for "vanity" goods in China is income _______.
elastic because the percentage change in the quantity demanded of "vanity" goods exceeds the percentage change in income
Which of the following statements describes cross price elasticity of demand?
As a result of a rise in the price of spinach with all else remaining constant, Ralph buys more broccoli, a substitute for spinach.
Which of the following statements illustrates income elasticity of demand?
A salary cut and no other changes has resulted in Mary buying less fast food.
When the price of ice cream rises from $3 to $5 a scoop, the quantity of ice cream bought decreases by 10 percent.
The price elasticity of demand for ice cream is _______.
0.2
In Pioneer Ville, the price elasticity of demand for bus rides is 0.5.
When the price of a bus ticket rises by 5 percent, _______.
the quantity of bus rides demanded decreases by 2.5 percent
The price elasticity of demand for a good is 0.2.
A 10 percent rise in the price will ______ the total revenue from sales of the good.
increase
If the price of a good falls and expenditure on the good rises, the demand for the good is _______.
elastic
When
the price of a good rises from $5 to $7 a unit, the quantity supplied increases from 110 to 130 units a day.
The price elasticity of supply is _______. The supply of the good is _______.
0.5; inelastic
The cross elasticity of demand for good A with respect to good B is 0.2.
A 10 percent change in the price of good B will lead to a ______ percent change in the quantity of good A demanded.
Goods A
and B are ______.
2; substitutes
A 2 percent increase in income increases the quantity demanded of a good by 1 percent.
The income elasticity of demand for this good is ______. The good is a ______ good.
1/2; normal
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Verified answer
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