Cross elasticity of demand measures how sensitive purchases of a specific product are to changes in:
  • the greater the amount of time over which buyers adjust to a price change.
  • the price elasticity of demand for farm products is less than 1.
  • the price of some other product.
  • Ace bandage; firm rubber tie-down
Which of the following is not characteristic of the demand for a commodity that is elastic?
  • The elasticity coefficient is less than one.
  • Price rises and demand is inelastic.
  • more elastic than the demand for the original software.
  • increase the quantity demanded by about 25 percent
If the supply of product X is perfectly elastic, an increase in the demand for it will increase:
  • decrease the quantity of X demanded by less than 4 percent.
  • equilibrium quantity, but equilibrium price will be unchanged.
  • increase the quantity demanded by about 25 percent
  • the price elasticity of demand for farm products is less than 1.
(Consider This) Which of the following best explains the significant increases in the equilibrium prices for higher education in the United States since the 1980s?
  • the railroad felt that the demand for passenger service was inelastic and opponents of the rate increase felt it was elastic
  • the price of some other product.
  • The supply of higher education is highly price inelastic and demand has increased substantially.
  • Ace bandage; firm rubber tie-down
The Illinois Central Railroad once asked the Illinois Commerce Commission for permission to increase its commuter rates by 20 percent. The railroad argued that declining revenues made this rate increase essential. Opponents of the rate increase contended that the railroad's revenues would fall because of the rate hike. It can be concluded that
  • the railroad felt that the demand for passenger service was inelastic and opponents of the rate increase felt it was elastic
  • The supply of higher education is highly price inelastic and demand has increased substantially.
  • the greater the amount of time over which buyers adjust to a price change.
  • the price elasticity of demand for farm products is less than 1.
If the demand for product X is inelastic, a 4 percent increase in the price of X will:
  • decrease the quantity of X demanded by less than 4 percent.
  • increase the quantity demanded by about 25 percent
  • equilibrium quantity, but equilibrium price will be unchanged.
  • a decrease in price will increase total revenue.
If the price of hand calculators falls from $10 to $9 and, as a result, the quantity demanded increases from 100 to 125, then:
  • relatively elastic.
  • demand is elastic.
  • increase the quantity demanded by about 25 percent
  • lard is an inferior good
If the income elasticity of demand for lard is −3.00, this means that:
  • demand is elastic.
  • relatively price inelastic.
  • relatively elastic.
  • lard is an inferior good
Suppose the price of a product rises and the total revenue of sellers increases
  • No conclusion can be reached with respect to the elasticity of supply.
  • a change in price will have no effect on the quantity supplied
  • The elasticity coefficient is less than one.
  • responsive the quantity supplied of X is to changes in the price of X.
The demand schedules for such products as eggs, bread, and electricity tend to be:
  • decrease the quantity of X demanded by less than 4 percent.
  • relatively elastic.
  • relatively price inelastic.
  • lard is an inferior good
(Consider This) Elastic demand is analogous to a __________ and inelastic demand to a _________.
  • the price of some other product.
  • Ace bandage; firm rubber tie-down
  • Cash rebates for purchases of automobiles.
  • The supply of higher education is highly price inelastic and demand has increased substantially.
If price and total revenue vary in opposite directions, demand is
  • relatively elastic.
  • demand is elastic.
  • relatively price inelastic.
  • lard is an inferior good
The elasticity of demand for a product is likely to be greater
  • responsive the quantity supplied of X is to changes in the price of X.
  • the price of some other product.
  • the greater the amount of time over which buyers adjust to a price change.
  • decrease the quantity of X demanded by less than 4 percent.
The price elasticity of supply measures how:
  • responsive the quantity supplied of X is to changes in the price of X.
  • decrease the quantity of X demanded by less than 4 percent.
  • the greater the amount of time over which buyers adjust to a price change.
  • increase the quantity demanded by about 25 percent
(Last Word) Which of the following is not an example of pricing based on group differences in elasticity of demand?
  • the price of some other product.
  • more elastic than the demand for the original software.
  • Ace bandage; firm rubber tie-down
  • Cash rebates for purchases of automobiles.
Suppose that the price of product X rises by 20 percent and the quantity supplied of X increases by 15 percent. The coefficient of price elasticity of supply for good X is:
  • Cash rebates for purchases of automobiles.
  • less than 1 and therefore supply is inelastic.
  • No conclusion can be reached with respect to the elasticity of supply.
  • W and Y.
0:0:1



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