Question 1

The demand for oil is inelastic.So,does an increase in the price of oil mean an increase in total revenue or a decrease in total revenue for oil producers?

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Question 2

You are the brand manager of Crest toothpaste and you observe that when you increase the price of Crest,your total revenue increases.How is that possible?

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Question 3

Recently the governor of Vermont proposed that cigarette taxes in Vermont should be increased substantially,from 44 cents a pack to 66 cents a pack.He estimates that Vermont can raise $20 million in revenue from this tax hike.He also pointed out that the neighboring state of New Hampshire was considering an increase in cigarette taxes.
a.How can it be that an increase in cigarette taxes will increase tax revenue,because,after all,a higher tax will increase cigarette prices and thereby decrease the quantity demanded?
b.If New Hampshire chooses not to increase cigarette taxes,is it likely that Vermont can still raise $20 million in tax revenue? Why or why not? Explain

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Question 4

If the price elasticity of supply of corn is 3.12,then is the supply of corn elastic or inelastic?

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Question 5

-Steve sells hotdogs from a vending cart downtown.The table above shows his daily total revenues at four different prices.Between which two prices is the demand for hotdogs
a.elastic?
b.unit elastic?
c.inelastic?

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-Steve sells hotdogs from a vending cart...

Question 6

-The figure above shows the demand curve for pizza.Using the midpoint method and moving from point A to point B,calculate the
a.percentage change in price.
b.percentage change in quantity demanded.
c.price elasticity of demand.

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-The figure above shows the demand curve...

Question 7

What is the price elasticity of supply? List and briefly define three cases of the price elasticity of supply.

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Question 8

Explain the total revenue test.

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Question 9

-The table above gives the demand schedule for museum visits.
a.You,as the resident economist,have been given the task of maximizing the museum's total revenue.What admission price should you charge?
b.What is the elasticity of demand between $6 and $4?
c.Moving along the demand schedule from $10 to $8 to $6 and ultimately to $4,how does the price elasticity of demand change in size?

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-The table above gives the demand schedule...

Question 10

Anna owns the Sweet Alps Chocolate store.She charges $10 per pound for her hand made chocolate.You,the economist,have calculated the elasticity of demand for chocolate in her town to be 2.5.If she wants to increase her total revenue,what advice will you give her?

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Question 11

"If the price falls and,as a result,the total revenue decreases,demand is elastic." Is the previous assertion correct?

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Question 12

-The table above gives the demand schedule for a good.Using the midpoint method,find the price elasticity of demand between points A and B,between B and C,between C and D,and between D and E.

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-The table above gives the demand schedule...

Question 13

Suppose the price elasticity of demand for bouquets of flowers is 4.0.You are charging $8 per bouquet.If you want to increase the quantity of bouquets you sell by 20 percent,what price should you charge?

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Question 14

-In the figure above,at which point (a,b,or c)along the linear demand curve illustrated would demand be
a.most elastic?
b.most inelastic?

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-In the figure above,at which point (a,b,or...

Question 15

Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds.Using the midpoint method,what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?

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Question 16

-The table above gives the demand schedule for a good.What is the total revenue at point A? At point B? At point C? At point D? At point E?

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-The table above gives the demand schedule...

Question 17

Suppose bad weather decreases the quantity of wheat by 12 percent.If the price elasticity of demand for wheat is 0.6,how would the crop failure affect the price of wheat? Would the crop decrease benefit or harm wheat farmers?

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Question 18

If a decrease in price increases total revenue,what can you determine about the elasticity of demand for the good?

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Question 19

If the price of a magazine increases from $5 to $7 and the quantity demanded of the magazines decreases from 10 million per month to 8 million per month,using the midpoint method,what is the price elasticity of demand? Show your work.Is the demand elastic,inelastic,or unit elastic?

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Question 20

If the price of suntan lotion increases from $6 to $8 per bottle and quantity demanded decreases from 900,000 bottles to 845,000 bottles,using the midpoint method,what is the price elasticity of demand for suntan lotion?

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Quiz 5: Elasticities of Demand and Supply

The demand for oil is inelastic.So,does an increase in the price of oil mean an increase in total revenue or a decrease in total revenue for oil producers?

You are the brand manager of Crest toothpaste and you observe that when you increase the price of Crest,your total revenue increases.How is that possible?

If the price elasticity of supply of corn is 3.12,then is the supply of corn elastic or inelastic?

-Steve sells hotdogs from a vending cart downtown.The table above shows his daily total revenues at four different prices.Between which two prices is the demand for hotdogs a.elastic? b.unit elastic? c.inelastic?

-The figure above shows the demand curve for pizza.Using the midpoint method and moving from point A to point B,calculate the a.percentage change in price. b.percentage change in quantity demanded. c.price elasticity of demand.

What is the price elasticity of supply? List and briefly define three cases of the price elasticity of supply.

Explain the total revenue test.

Anna owns the Sweet Alps Chocolate store.She charges $10 per pound for her hand made chocolate.You,the economist,have calculated the elasticity of demand for chocolate in her town to be 2.5.If she wants to increase her total revenue,what advice will you give her?

"If the price falls and,as a result,the total revenue decreases,demand is elastic." Is the previous assertion correct?

-The table above gives the demand schedule for a good.Using the midpoint method,find the price elasticity of demand between points A and B,between B and C,between C and D,and between D and E.

Suppose the price elasticity of demand for bouquets of flowers is 4.0.You are charging $8 per bouquet.If you want to increase the quantity of bouquets you sell by 20 percent,what price should you charge?

-In the figure above,at which point (a,b,or c)along the linear demand curve illustrated would demand be a.most elastic? b.most inelastic?

Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds.Using the midpoint method,what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?

-The table above gives the demand schedule for a good.What is the total revenue at point A? At point B? At point C? At point D? At point E?

Suppose bad weather decreases the quantity of wheat by 12 percent.If the price elasticity of demand for wheat is 0.6,how would the crop failure affect the price of wheat? Would the crop decrease benefit or harm wheat farmers?

If a decrease in price increases total revenue,what can you determine about the elasticity of demand for the good?

If the price of a magazine increases from $5 to $7 and the quantity demanded of the magazines decreases from 10 million per month to 8 million per month,using the midpoint method,what is the price elasticity of demand? Show your work.Is the demand elastic,inelastic,or unit elastic?

If the price of suntan lotion increases from $6 to $8 per bottle and quantity demanded decreases from 900,000 bottles to 845,000 bottles,using the midpoint method,what is the price elasticity of demand for suntan lotion?