question

Price elasticity of demand measures

answer

how responsive quantity demanded is to a change in price.

question

Suppose the value of the price elasticity of demand is -3. What does this mean?

answer

A 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent.

question

If the percentage increase in price is 15 percent and the value of the price elasticity of demand is -3, then quantity demanded...

answer

will decrease by 45 percent.

question

If demand is inelastic, the absolute value of the price elasticity of demand is...

answer

less than one.

question

If 50 units are sold at a price of $20 and 80 units are sold at a price of $15, what is the absolute value of the price elasticity of demand? Use the midpoint formula.

answer

1.62

question

Suppose a hurricane decreased the supply of oranges so that the price of oranges rose from $120 a ton to $180 a ton and quantity sold decreased from 800 tons to 240 tons. What is the absolute value of the price elasticity of demand?

answer

2.69

question

Jaycee Jeans sold 40 pairs of jeans at a price of $40. When it lowered its price to $20, the quantity sold increased to 60 pairs. Calculate the absolute value of the price elasticity of demand. Use the midpoint formula.

answer

0.6

question

If a 35 percent increase in price of golf balls led to a 42 percent decrease in quantity demanded, then the demand for golf balls is...

answer

relatively elastic.

question

When there few close substitutes available for a good, demand tends to be...

answer

relatively inelastic.

question

Which of the following goods would have the most inelastic demand?

answer

bread

question

Total revenue equals

answer

price per unit times quantity sold.

question

When demand is elastic, a fall in price causes total revenue to rise because

answer

the increase in quantity sold is large enough to offset the lower price.

question

If the price elasticity of demand for canned soup is estimated at -1.62. What happens to sales revenue if the price of canned soup rises?

answer

It falls.

question

Calculate the income elasticity if an 8 percent increase in income leads to a 4 percent increase in quantity demanded for organic produce.

answer

0.5

question

If the cross-price elasticity of demand for computers and software is negative, this means the two goods are

answer

complements

question

Suppose Pump-U-Up lowers the price of its gym membership by 10 percent and as a result, Sweat-It-Out experienced a 16 percent decline in its gym membership. What is the value of the cross-price elasticity between the two gym memberships?

answer

1.6

question

If the cross-price elasticity of demand between Breeze Detergent and Faber Detergent is a relatively large positive number, then it indicates that

answer

the two brands of detergent are close substitutes.

question

If a 5 percent increase in income leads to a 10 percent decrease in quantity demanded for a product,

answer

an inferior good.

question

Last year, Joan bought 50 pounds of hamburger when her household income was $40,000. This year, her household income was only $30,000 and Joan bought 60 pounds of hamburger. Holding everything else constant, Joan's income elasticity of demand for hamburger is

answer

negative, so Joan considers hamburger to be an inferior good.

question

Suppose a 4 percent increase in price results in a 2 percent increase in the quantity supplied of a good. Calculate the price elasticity of supply and characterize the product.

answer

0.5; The product is inelastic.

question

Suppose that the price of a money clip increases from $0.75 to $0.90 and quantity supplied rises from 8,000 units to 10,000 units. Use the midpoint formula to calculate the price elasticity of supply.

answer

1.22

question

The price elasticity of the supply of teenage labor services is approximately 1.36. Suppose the minimum wage rises from $7.25 per hour to $8.75. Using the midpoint formula, what is theapproximate change in the quantity of teenage labor supplied?

answer

25.5 percent

question

The price elasticity of supply is usually a positive number because

answer

quantity supplied increases in response to price increases.

The price is based on these factors:

Academic level

Number of pages

Urgency

Basic features

- Free title page and bibliography
- Unlimited revisions
- Plagiarism-free guarantee
- Money-back guarantee
- 24/7 support

On-demand options

- Writer’s samples
- Part-by-part delivery
- Overnight delivery
- Copies of used sources
- Expert Proofreading

Paper format

- 275 words per page
- 12 pt Arial/Times New Roman
- Double line spacing
- Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Delivering a high-quality product at a reasonable price is not enough anymore.

That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
## Recent Comments