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Terms in this set (17)
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.
When the price of a good
increased by 5 percent, the quantity demanded of it decreased 10 percent.
Demand for this good is ______.
elastic
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.
When the price of a good increased by 10
percent, the quantity demanded of it decreased 2 percent.
The price elasticity of demand is ______. A price rise will ______ total revenue.
0.20; increase
When the price of a good increased by 10 percent, the quantity demanded of it decreased 2 percent.
An example of a good with such a demand is _______.
clothing
The
price elasticity of demand for Russell's chocolate chip cookies is 1.5. Russell wants to increase his total revenue.
Russell should _____ the price of his chocolate chip cookies because the demand for chocolate chip cookies is ______.
lower; elastic
When the price of a good increased by 3 percent, the quantity demanded of it decreased 6 percent.
Most likely, this good ______ and
______.
is a luxury; has good substitutes
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 describe an inelastic demand?
Megan did not buy too many hockey tickets even though their price dropped by 10 percent.
The graph illustrates the demand for movie tickets.
The demand for movie tickets is elastic over the price range $7 to $9.
True
The graph illustrates the demand for movie tickets.
If the price of a movie ticket falls from $9 to $7, total revenue ______.
increases because demand is elastic
The graph illustrates the demand for movie tickets
When the price is $8 a ticket, the price elasticity of demand for movie tickets is _____.
4
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.
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
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
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
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.
Because total revenue and the price change in
_________, the demand for home heating oil is ______.
the same direction; inelastic
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Verified questions
ECONOMICS
Draw a diagram with aggregate demand, short-run aggregate supply, and long-run aggregate supply. Be careful to label the axes correctly.
Verified answer
ECONOMICS
Does monetary policy or fiscal policy most directly affect the economy? Why?
Verified answer
ECONOMICS
Reserves greater than the required amounts _____
Verified answer
QUESTION
For each of the following industry practices, explain whether the practice supports the conclusion that there is tacit collusion in this industry. A. For many years the price in the industry has changed infrequently , and all the firms in the industry charge the same price. The largest firm publishes a catalog containing a "suggested" retail price. Changes in price coincide with changes in the catalog. B. There has been considerable variation in the market shares of the firms in the industry over time. C. Firms in the industry build into their products unnecessary features that make it hard for consumers to switch from one company's products to another 's. D. Firms meet yearly to discuss their annual sales forecasts. E. Firms tend to adjust their prices upward at the same times.
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