Q&A Hero

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Q: 18. Use the accompanying graph to answer the following questions. a. A study shows the many health benefits of eating eggs for breakfast. Demand rises by 6 units at each price. Draw this on the graph.b. What is the percentage change in equilibrium price for eggs?c. If the percentage change in quantity demanded for toast decreased by 1/2 of what you found in part (b) for eggs, what is the cross-price elasticity of demand for eggs and toast?d. Will this be positive or negative? Are eggs and toast related to each other?

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Q: 14. If we know that the price elasticity of demand is:a. -5, graph the demand curve.b. -u00bd graph the demand curve.c. infinite, graph the demand curve.

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Q: SHORT ANSWER1. What is the price elasticity of demand? How is it calculated?

Q: If the price elasticity of supply is 1.5, we know that supply isa. relatively elastic. b. relatively inelastic. c. perfectly inelastic.d. unitary elastic.e. perfectly elastic.

Q: Consider two labor markets. In the first, the elasticity of supply is relatively elastic, while it is relatively inelastic in the latter. Imposing a minimum wage in each market would result in ________ unemployment in the first market and ________ unemployment in the second.a. lower; lower b. higher; higherc. unchanged; unchangedd. lower; highere. higher; lower

Q: Firms supplying twisty-ties decrease the quantity supplied of inputs by 10 percent when the price decreases by 5 percent. The price elasticity of supply for twisty-ties isa. 4.0. b. 0.4. c. 2.0.d. 0.2.e. 1.0.

Q: The initial price of picture frames is $6 and suppliers offer 20 frames. When the price falls to $4, suppliers offer only 10. The price elasticity of supply isa. 0.33. b. 0.67. c. 1.67.d. 0.60.e. 0.40.

Q: The percentage change in price is 5 percent, while the price elasticity of supply is 0. The percentage change in quantity supplieda. is 1.5 percent. b. does not change. c. is 2 percent.d. is -3 percent.e. is -7 percent.

Q: When the price of a basketball is $15, the quantity supplied is 5,000. When the price increases to $20, the quantity supplied is 10,000. The price elasticity of supply isa. 2.33. b. 0.67. c. 0.33.d. 0.43.e. 0.29.

Q: If the price elasticity of supply is 2.5, we know that it isa. perfectly elastic. b. perfectly inelastic. c. unitary elastic.d. relatively inelastic.e. relatively elastic.

Q: The price elasticity supply of doctors could be considered ________ because it takes a minimum of four to six years of training to be able to work as a physician.a. perfectly elastic b. unitary elastic c. relatively inelasticd. relatively elastice. perfectly inelastic

Q: Masielles Furniture produces high-quality wooden bedroom sets that take approximately four months to make, from start to finish. The price elasticity of supply for these bedroom sets in the short term isa. unitary elastic. b. relatively inelastic. c. perfectly inelastic.d. relatively elastic.e. perfectly elastic.

Q: As price elasticity of supply becomes more elastic over time, the overall shape of the supply curve a. becomes more vertical. b. remains unchanged. c. becomes closer to 45 degrees from the origin. d. becomes completely vertical. e. becomes more horizontal.

Q: Over time, the price elasticity of supply for sunglasses will become morea. inelastic. b. unitary elastic. c. unchanged.d. elastic.e. perfectly elastic.

Q: A local sandwich shop can quickly place an order for food with its local vendors if it uses up its existing resources quickly. This indicates that the price elasticity of supply isa. unitary elastic. b. perfectly elastic. c. perfectly inelastic.d. relatively elastic.e. relatively inelastic.

Q: If the owner of Kujis Treats finds that, in the long run, he can trade one type of input for another, the price elasticity of supply isa. relatively elastic. b. relatively inelastic. c. perfectly elastic.d. perfectly inelastic.e. unitary elastic.

Q: A professional hockey arena has a maximum seating capacity of 20,000 people. The price elasticity of supply isa. perfectly inelastic. b. perfectly elastic. c. inelastic.d. relatively elastic.e. elastic.

Q: A perfectly elastic supply curvea. is vertical. b. is horizontal. c. is downward sloping.d. is backward bending.e. has an infinite slope.

Q: A vertical supply curve can be described asa. perfectly elastic. b. perfectly inelastic.c. unitary elastic.d. relatively elastic. e. relatively inelastic.

Q: Which of the following statements is FALSE? a. The flexibility of producers helps determine the supply elasticity. b. The time frame helps determine the supply elasticity. c. The perfectly inelastic supply curve is vertical. d. The perfectly elastic supply curve is horizontal. e. Price elasticity of supply can never equal one.

Q: The price elasticity of supply is a. constant across the short run and long run. b. the percentage change in the quantity supplied divided by the percentage change in price. c. always negative. d. the slope of the supply curve. e. the percentage change in the price divided by the percentage change in quantity supplied.

Q: If the supply of a good is perfectly inelastic, then the price elasticity of supply will equal a. zero. b. one. c. greater than zero but less than one. d. greater than one but less than infinity. e. negative one.

Q: When two goods are complements to each other, the cross-price elasticity will a. begin by being positive but becomes negative over time. b. be unaffected by goods being complements. c. be zero. d. be positive. e. be negative.

Q: Refer to the accompanying table to answer the following questions.Price of ErasersQuantity Demanded of ErasersQuantity Demanded of Pencils $.501012$1.00 811$1.50 710$2.00 6 9$2.50 5 8The price of erasers increases from $0.50 to $1.00 per eraser. Using the midpoint method, what is the cross-price elasticity of demand between pencils and erasers?a. - 0.13 b. 7.67 c. -7.67d. 0.13e. -3

Q: If the cross-price elasticity of demand between Good A and Good B is 2, the price of Good B increases, and the price elasticity of demand for Good B is elastic, we can expect to see a ________ change in the quantity demanded for Good A.a. positive, zero b. positive, small c. negative, infinited. negative, one-for-onee. negative, large

Q: When the price of erasers increases from $1.50 to $2.50, the quantity demanded of pencils is unchanged. The cross-price elasticity of demand between erasers and pencils is ________ because erasers and pencils are ________.a. 1; substitutes b. u00bd ; complements c. 0; normal goodsd. 0; unrelatede. -u00bd ; complements

Q: A local bakery gives information on consumer purchasing habits for muffins and cupcakes. It says that when the price of a muffin is $1, people buy 55 cupcakes. When the price of a muffin is raised to $2, cupcake purchases go up to 65 cupcakes. The cross-price elasticity of demand isa. 0.50. b. 0.25. c. 0.67.d. 2.00.e. 4.00.

Q: When the price of pencils increases from $1.50 to $2.50, there is an increase in quantity demanded of pens from 100 to 150. The cross-price elasticity of demand between pencils and pens isa. 1.25. b. 0.50. c. 0.40.d. 0.80.e. 0.75.

Q: We would expect to see a positive cross-price elasticity betweena. peanut butter and jelly. b. ice cream and frozen yogurt. c. basketballs and steak.d. sneakers and socks.e. computers and iPods.

Q: If the percentage change in quantity demanded of Good B is 2 percent and the percentage change in the price of Good A is -10 percent, what is the cross-price elasticity of demand?a. 0.20 b. -5 c. 1d. 5e. -0.20

Q: Which one of the following pairs of goods is likely to have a negative cross-price elasticity of demand?a. purses and backpacks b. sofas and dining room tables c. manicures and pedicuresd. shoes and sockse. trucks and sedans

Q: If the cross-price elasticity of demand is 6, Good A and Good B area. inferior goods. b. complements. c. substitutes.d. normal goods.e. luxury goods.

Q: If the cross-price elasticity of demand is -5, Good A and Good B area. inferior goods. b. complements. c. substitutes.d. normal goods.e. luxury goods.

Q: Cross-price elasticity measures the relationship betweena. normal goods and inferior goods. b. complements and inferior goods. c. necessities and luxuries.d. two goods and services.e. income and substitute goods.

Q: When you change your quantity demanded of one good because of a change in price of another good, you are acting according to the principle ofa. price elasticity of demand. b. cross-price elasticity of demand. c. income elasticity of demand.d. price elasticity of supply.e. income elasticity of supply.

Q: The measure of the responsiveness of the demand for one good to the percentage change in the price of the other good isa. slope. b. price elasticity of supply. c. price elasticity of demand.d. cross-price elasticity.e. income elasticity.

Q: When two goods are unrelated then a. cross-price elasticity of demand will be zero. b. cross-price elasticity of demand will be positive. c. cross-price elasticity of demand will be negative. d. the demand for both goods will be elastic. e. cross-price elasticity of demand will be infinite.

Q: The cross-price elasticity is measured by a. percentage change in the price of one good divided by the percentage change in the demand for the other good. b. percentage change in the demand for one good divided by the percentage change in the price of the other good. c. percentage change in the demand for one good divided by the percentage change in the demand for the other good. d. percentage change in the price of one good divided by the percentage change in the price of the other good. e. the change in the price of one good divided by the change in demand for the other good.

Q: When two goods are substitutes for each other, what will the cross-price elasticity be? a. The cross-price elasticity will initially be positive but eventually become negative. b. It is unaffected by goods being substitutes. c. It will be zero. d. It will be positive. e. It will be negative.

Q: Demand for which of the following goods or services is likely to be the LEAST elastic in cold weather? a. a blue hooded sweatshirt with fur-lined pockets b. a blue hooded sweatshirt c. a hooded sweatshirt d. a blue sweatshirt e. a sweatshirt

Q: The introduction of new gaming systems that can compete effectively with the Nintendo console will make the demand for the Nintendo console becomea. more price elastic. b. more price inelastic. c. perfectly price elastic.d. perfectly price inelastic.e. unchanged.

Q: When her income increases from $10,000 to $20,000, as shown in the accompanying table, Juanita increases the quantity demanded from 3 to 7 rolls at a price of $3. From the midpoint method, income elasticity of demand for sushi isPrice(per roll)Quantity Demanded(income = $10,000/year)Quantity Demanded(income = $20,000/year)$159$248$337$426$515a. 0.67. b. 1.20.c. 1.33.d. 0.83. e. 0.50.

Q: What good is most likely to have an income elasticity of demand equal to 8?a. a doctors visit b. toilet paper c. used clothingd. a five-star hotele. college coursework

Q: What good is most likely to have a negative income elasticity of demand?a. steak b. caviar c. designer clothingd. pizzae. instant noodles

Q: When Noelle received a promotion at work, her income rose by 50 percent. The income elasticity of demand for steak was found to be 1.5. For her, steak is a(n)a. inferior good. b. necessity. c. complement to potatoes.d. substitute for chicken.e. luxury.

Q: When Ruben starts working at his first full-time job out of college with a $60,000 salary, he is likely to buy more ________ and less ________. a. sushi; canned tuna b. ramen noodles; steak c. BMWs; Kias d. computer hardware; computer software e. hamburger; salmon

Q: If the percentage change in the quantity consumed of pizza is 8 percent and the percentage change in income is 2 percent, what is the income elasticity of demand for pizza?a. - 0.25 b. 4 c. 0.25d. - 4e. -1

Q: If the income elasticity of demand for noodles is -2 and the percentage change in the quantity consumed is 5 percent, what is the percentage change in income?a. 2.5 percent b. 10 percent c. -2.5 percentd. -10 percente. -0.4 percent

Q: If the income elasticity of demand for good smartphone apps is 5 and the percentage change in income is 10 percent, what is the percentage change in the quantity consumed?a. - 0.5 percent b. -5 percent c. 50 percentd. 0.5 percente. 2 percent

Q: Refer to the information in the accompanying table. Without any calculations, we know that sushi is a(n)Price (per roll)Quantity Demanded(income = $10,000/year)Quantity Demanded (income = $30,000/year)$159$248$337$426$515a. necessity. b. substitute for fish sticks.c. normal good.d. inferior good. e. complement to sake.

Q: Howard buys 5 suits a year when he earns $70,000. When his income increases to $200,000, he buys 15 suits a year. From the midpoint method, his income elasticity of demand for suits isa. 1.04. b. 0.96. c. -1.04.d. -0.96.e. 0.08.

Q: Shawna wins the lottery and her income increases by 60 percent. She used to buy 10 pints of cottage cheese per month and now she buys 12 pints. Her income elasticity of demand for cottage cheese is ________, making it a(n) ________ good.a. 3; luxury b. 3.59; normal c. 0.33; necessityd. 0.28; inferiore. - 0.33; inferior

Q: When her income falls from $50,000 to $20,000, Arianna increases her monthly purchase of hamburger from 20 pounds to 35 pounds. From the midpoint method, Ariannas income elasticity of demand for hamburgers isa. -1.57. b. - 0.63. c. 0.54.d. - 0.85.e. 1.57.

Q: A firm knows that Senecas income elasticity of demand for hair ties is 5; for Janelle, it is 0.2. A firm can reason that a hair tie is a(n) ________ good for Seneca while it is a(n) ________ good for Janelle.a. normal; inferior b. complement; substitute c. necessity; luxuryd. inferior; normale. luxury; necessity

Q: A shopping mall owner is given a list of income elasticity of demand values. Which one represents a necessity?a. - 5 b. - 0.5 c. 0d. 5e. 0.5

Q: If the income elasticity of demand for laptops is 3.5, you know that laptops are a(n) ________ good.a. substitute b. inferior c. luxuryd. necessitye. complement

Q: Used car dealers find that their sales rise in a recession. We can be certain that consumers view used cars asa. necessities. b. normal goods. c. luxuries.d. substitutes.e. inferior.

Q: When incomes fall by 20 percent, quantity demanded of specialty baked goods falls by 50 percent. Specialty baked goods are a. inferior goods. b. necessities. c. substitutes for mass-produced bread. d. luxuries. e. complements to butter.

Q: If the income elasticity of demand is -3, the good will be a(n) ________ good.a. complement b. substitute c. necessityd. inferiore. luxury

Q: If the income elasticity of demand is 0.5, the good will be a(n) ________ good.a. complement b. substitute c. necessityd. inferiore. luxury

Q: Income elasticity of demand for professional haircuts is found to be 1.7. This service is a a. normal good and necessity good. b. luxury good but not a normal good. c. necessity good but not a normal good. d. substitute good. e. normal good and a luxury good.

Q: The income elasticity of demand for a good measures the responsiveness of ________ to a change in ________. a. quantity demanded; price of a related good b. quantity demanded; income c. demand; price of good d. quantity demanded; price of a good e. income; quantity demanded

Q: Super Economy Brand products have an income elasticity of -1.4. Thus, these are ________ goods.a. necessity b. inferior c. luxuryd. normale. complementary