Question 1

If the income elasticity of demand for a good is -1.40,is the good a normal or inferior good?

Accepted Answer

The answer of If the income elasticity of demand for...

Question 2

Scenario 5-2
Suppose the demand function for good X is given by:  where  is the quantity demanded of good X,  is the price of good X,and  is the price of good Y,which is related to good X.
-Refer to Scenario 5-2.Using the midpoint method,if the price of good X is $10 and the price of good Y increases from $8 to $10,the cross price elasticity of demand is about

Accepted Answer

The answer of Scenario 5-2
Suppose the demand function for good...

Question 3

Suppose the price elasticity of demand for a product is 0.5.If a supplier wants to increase revenue,what change should it make to price,if any?

Accepted Answer

The answer of Suppose the price elasticity of demand for...

Question 4

With regard to elasticity,if a firm has a longer time to adjust to a price increase,supply will be more

Accepted Answer

The answer of With regard to elasticity,if a firm has...

Question 5

In the short run,as compared to the long run,both the price elasticity of demand and the price elasticity of supply tend to be more

Accepted Answer

The answer of In the short run,as compared to the...

Question 6

If the cross-price elasticity of demand between two goods is negative,what is the relationship between the two goods?

Accepted Answer

The answer of If the cross-price elasticity of demand between...

Question 7

Scenario 5-6
Consider the markets for mobile and landline telephone service.Suppose that when the average income of residents of Plainville is $55,000 per year,the quantity demanded of landline telephone service is 12,500 and the quantity demanded of mobile service is 28,000.Suppose that when the price of mobile service rises from $100 to $120 per month,the quantity demanded of landline service decreases to 11,000.Suppose also that when the average income increases to $60,000,the quantity demanded of mobile service increases to 33,000.
-Refer to Scenario 5-6.Using the midpoint method,what is the cross price elasticity of demand for landline and mobile service?

Accepted Answer

The answer of Scenario 5-6
Consider the markets for mobile and...

Question 8

Figure 5-21 
-Refer to Figure 5-21.Using the midpoint method,what is the price elasticity of supply between $15 and $25?

Accepted Answer

The answer of Figure 5-21 
-Refer to Figure 5-21.Using the...

Question 9

Scenario 5-2
Suppose the demand function for good X is given by:  where  is the quantity demanded of good X,  is the price of good X,and  is the price of good Y,which is related to good X.
-Refer to Scenario 5-2.Good X and Good Y are related as

Accepted Answer

The answer of Scenario 5-2
Suppose the demand function for good...

Question 10

With regard to elasticity,as a firm nears its production capacity,supply becomes more

Accepted Answer

The answer of With regard to elasticity,as a firm nears...

Question 11

Scenario 5-6
Consider the markets for mobile and landline telephone service.Suppose that when the average income of residents of Plainville is $55,000 per year,the quantity demanded of landline telephone service is 12,500 and the quantity demanded of mobile service is 28,000.Suppose that when the price of mobile service rises from $100 to $120 per month,the quantity demanded of landline service decreases to 11,000.Suppose also that when the average income increases to $60,000,the quantity demanded of mobile service increases to 33,000.
-Refer to Scenario 5-6.Using the midpoint method,what is the income elasticity of demand for mobile service?

Accepted Answer

The answer of Scenario 5-6
Consider the markets for mobile and...

Question 12

Suppose the price elasticity of demand for a product is 1.3.If a supplier wants to increase revenue,what change should it make to price,if any?

Accepted Answer

The answer of Suppose the price elasticity of demand for...

Question 13

Scenario 5-6
Consider the markets for mobile and landline telephone service.Suppose that when the average income of residents of Plainville is $55,000 per year,the quantity demanded of landline telephone service is 12,500 and the quantity demanded of mobile service is 28,000.Suppose that when the price of mobile service rises from $100 to $120 per month,the quantity demanded of landline service decreases to 11,000.Suppose also that when the average income increases to $60,000,the quantity demanded of mobile service increases to 33,000.
-Refer to Scenario 5-6.Considering the income elasticity,what type of good is mobile telephone service?

Accepted Answer

The answer of Scenario 5-6
Consider the markets for mobile and...

Question 14

Scenario 5-6
Consider the markets for mobile and landline telephone service.Suppose that when the average income of residents of Plainville is $55,000 per year,the quantity demanded of landline telephone service is 12,500 and the quantity demanded of mobile service is 28,000.Suppose that when the price of mobile service rises from $100 to $120 per month,the quantity demanded of landline service decreases to 11,000.Suppose also that when the average income increases to $60,000,the quantity demanded of mobile service increases to 33,000.
-Refer to Scenario 5-6.Considering the cross price elasticity of demand for mobile and landline telephone service,is the cross price elasticity of demand positive or negative and do the consumers of Plainville regard these goods as substitutes or complements?

Accepted Answer

The answer of Scenario 5-6
Consider the markets for mobile and...

Question 15

If the income elasticity of demand for a good is 0.56,is the good a normal or inferior good?

Accepted Answer

The answer of If the income elasticity of demand for...

Question 16

Figure 5-21 
-Refer to Figure 5-21.Using the midpoint method,what is the price elasticity of supply between $25 and $35?

Accepted Answer

The answer of Figure 5-21 
-Refer to Figure 5-21.Using the...

Question 17

If the cross-price elasticity of demand between two goods is positive,what is the relationship between the two goods?

Accepted Answer

The answer of If the cross-price elasticity of demand between...

Question 18

Suppose the price elasticity of demand for a product is 1.If a supplier wants to increase revenue,what change should it make to price,if any?

Accepted Answer

The answer of Suppose the price elasticity of demand for...

Question 19

Suppose you manage a baseball stadium.To pay the salary for a star player,you would like to increase the total revenue from ticket sales.Should you increase or decrease the price of a ticket to increase revenue? Explain.

Accepted Answer

The answer of Suppose you manage a baseball stadium.To pay...

Question 20

Scenario 5-2
Suppose the demand function for good X is given by:  where  is the quantity demanded of good X,  is the price of good X,and  is the price of good Y,which is related to good X.
-Refer to Scenario 5-2.Using the midpoint method,if the price of good Y is $10 and the price of good X decreases from $5 to $3,what is the price elasticity of demand for good X? Is the demand elastic,unitary elastic,or inelastic?

Accepted Answer

The answer of Scenario 5-2
Suppose the demand function for good...

Quiz 5: Elasticity and Its Applications: Part A

If the income elasticity of demand for a good is -1.40,is the good a normal or inferior good?

Suppose the price elasticity of demand for a product is 0.5.If a supplier wants to increase revenue,what change should it make to price,if any?

With regard to elasticity,if a firm has a longer time to adjust to a price increase,supply will be more

In the short run,as compared to the long run,both the price elasticity of demand and the price elasticity of supply tend to be more

If the cross-price elasticity of demand between two goods is negative,what is the relationship between the two goods?

Figure 5-21 -Refer to Figure 5-21.Using the midpoint method,what is the price elasticity of supply between $15 and $25?

Scenario 5-2 Suppose the demand function for good X is given by: where is the quantity demanded of good X, is the price of good X,and is the price of good Y,which is related to good X. -Refer to Scenario 5-2.Good X and Good Y are related as

With regard to elasticity,as a firm nears its production capacity,supply becomes more

Suppose the price elasticity of demand for a product is 1.3.If a supplier wants to increase revenue,what change should it make to price,if any?

If the income elasticity of demand for a good is 0.56,is the good a normal or inferior good?

Figure 5-21 -Refer to Figure 5-21.Using the midpoint method,what is the price elasticity of supply between $25 and $35?

If the cross-price elasticity of demand between two goods is positive,what is the relationship between the two goods?

Suppose the price elasticity of demand for a product is 1.If a supplier wants to increase revenue,what change should it make to price,if any?

Suppose you manage a baseball stadium.To pay the salary for a star player,you would like to increase the total revenue from ticket sales.Should you increase or decrease the price of a ticket to increase revenue? Explain.