Elasticity and Its Application

According to Chapter 5, what does the concept of elasticity measure in economics?

If the price elasticity of demand for a good is 2, what does this imply?

Which of the following goods is likely to have the most inelastic demand, according to the determinants discussed in Chapter 5?

Using the midpoint method, if the price of a good rises from dollar 4 to dollar 6 and the quantity demanded falls from 120 to 80, what is the price elasticity of demand?

If a demand curve is perfectly inelastic, its elasticity is equal to zero, and the curve is:

When demand is inelastic (price elasticity is less than 1), how does an increase in price affect total revenue?

Along a linear, downward-sloping demand curve, what happens to the price elasticity of demand as you move from high-price, low-quantity points to low-price, high-quantity points?

If the income elasticity of demand for a good is negative, what type of good is it?

What does a positive cross-price elasticity of demand between two goods, like hot dogs and hamburgers, indicate?

According to the analysis in Chapter 5, why is the supply of beachfront land considered inelastic?

In the case of the discovery of a new, more productive wheat hybrid, why does total revenue for farmers fall?

Why did OPEC's strategy to keep oil prices high by reducing supply fail in the long run?

If a policy of drug interdiction shifts the supply curve for illegal drugs to the left and the demand for these drugs is inelastic, what is the likely outcome on drug-related crime?

In a linear demand curve from Figure 4, at a price of dollar 4, quantity is 6, and total revenue is dollar 24. What is the price elasticity of demand at this point?

Which factor is NOT listed as a primary determinant of the price elasticity of demand in Chapter 5?

If the price of milk increases from dollar 2.85 to dollar 3.15 and the quantity supplied by dairy farmers increases from 9,000 to 11,000 gallons, what is the price elasticity of supply calculated using the midpoint method?

In the short run, the quantity of a good supplied is not very responsive to price changes. Why does the price elasticity of supply tend to be greater in the long run?

What does a perfectly elastic supply curve look like, and what does it imply?

If a 10 percent increase in gasoline prices reduces gasoline consumption by about 2.5 percent after a year and about 6 percent after five years, this demonstrates which determinant of demand elasticity?

If an increase in price from dollar 4 to dollar 5 causes quantity demanded to fall from 100 to 90, what is the change in total revenue?

The price elasticity of supply is computed as the percentage change in quantity supplied divided by what?

If demand for a product is elastic, what should a firm do to increase its total revenue?

In the application regarding drug interdiction, what alternative policy is suggested to reduce both drug use and drug-related crime?

A key determinant of the price elasticity of supply is the:

The demand for which of the following is likely to be more elastic than the demand for food?

If a 1 percent increase in income leads to a 2 percent increase in the quantity demanded of a good, what is the income elasticity of demand and what type of good is it?

Which of the following scenarios would result in a perfectly inelastic supply curve (elasticity equals 0)?

If a firm is operating on the elastic portion of its demand curve, a decrease in price will lead to:

What is the primary reason the textbook gives for using the midpoint method to calculate elasticity?

In the application about farming on page 128, a technological advance that increases the supply of wheat from 100 to 110 units causes the price to fall from dollar 3 to dollar 2. What is the change in the farmers' total revenue?

What is the primary difference between the short-run and long-run price elasticity of supply for most goods?

If an increase in the price of computers leads to a decrease in the quantity demanded of software, what is the cross-price elasticity and what does it signify?

The variety of supply curves shown in Figure 6 on page 127, where elasticity is high at low levels of output and low at high levels of output, is typical for an industry where:

If a 10 percent increase in price causes a 4 percent reduction in the quantity of cigarettes smoked, what is the price elasticity of demand for cigarettes?

Why do economists often drop the minus sign when reporting the price elasticity of demand?

If a firm faces a demand curve that is perfectly elastic, what will happen to its total revenue if it raises its price above the market price?

The demand for necessities like food and clothing tends to have:

If the price of a good is dollar 12 and a firm sells 100 units, and then the price falls to dollar 10 and the firm sells 150 units, what is the change in total revenue?

The case study of OPEC's pricing strategy in the 1970s and 1980s is used to illustrate:

A flatter demand curve passing through a given point represents:

Why do economists believe that a policy of drug education would be more effective at reducing drug-related crime than drug interdiction?

If a 10 percent increase in the price of butter causes the quantity demanded of margarine to increase by 20 percent, what is the cross-price elasticity of demand?

On a linear demand curve, where is total revenue maximized?

If a good has an income elasticity of 1.5, it is considered:

According to the textbook, what is the main reason that the 'good news' of a technological advance in farming can be 'bad news' for farmers?

If a supply curve is vertical, its price elasticity of supply is:

When the price of a good falls, the total change in consumption is composed of:

If the price of a movie ticket increases by 10 percent and the quantity of popcorn demanded falls by 5 percent, what is the cross-price elasticity of demand, and what does it imply about the two goods?

In the linear demand curve example in Figure 4, at what price is total revenue maximized?

What is the common element in the applications of farming, OPEC, and drug interdiction presented in Chapter 5?