question
Graphs A & B show two demand curves for two different products. Which of the following statements is correct about demand for these two products?
answer
Demand in Graph A is price elastic while the demand in Graph B is price inelastic
question
The average income in Kansas City has gone up by 4%. During the same time period the number of bottles of wine sold in Kansas City has gone up by 7%. This indicates that:
answer
the demand for wine is income elastic.
question
On Graph A if price is raised total revenue will
answer
fall.
question
On Graph A if price is reduced total revenue will
answer
rise.
question
On Graph C if price is reduced from $20 to $10 the total revenue will
answer
decrease.
question
On Graph C from $95 to $65 demand is
answer
elastic.
question
The average income in Kansas City has gone down by 10%. During the same time period the number of twelve packs of Natural Light beer purchased went up by 3%. This indicates that
answer
Natural Light beer is an inferior product.
question
Price elasticity of demand for product Q is 4.5. That means within the given range
answer
if the price of product Q is raised by 1% quantity demanded will decrease by 4.5%.
question
If income of buyers increases demand for
answer
some products will increase and for other products will decrease.
question
What is the price elasticity of demand on Graph C in the price range of $95 to $65? [round up to two decimal points]
answer
2.60.
question
The price of Lee Jeans is cut by 5% and the revenue generated from selling of Lee Jeans increases by 8%. That means that the demand for Lee Jeans is:
answer
price elastic.
question
Which of the following products is most likely to have an elastic supply?
answer
hair cuts.
question
Price elasticity of demand measures
answer
the responsiveness of quantity demanded of a product to a change in its price
question
Why would the number of substitutes for a product affect the price elasticity of demand for that product?
answer
The more substitutes a product has the more elastic the demand for it will be since the buyers have more options to choose from.
question
At price $9 sellers supply 140 dishes of crocodile soup. At price $5 sellers supply 65 dishes of crocodile soup. What is the price elasticity of supply of crocodile soup in this range? [round to the nearest 2 decimal points.]
answer
1.28
question
The price elasticity of demand for product Q is 4.5. That means within the given range
answer
if the price of product Q is raised by 5% quantity demanded will decrease by 22.5%.
question
On Graph C what is the price elasticity of demand in the price range of $10 to $20? [round up to two decimal points]
answer
0.25.
question
As the price of wine On Graph C was raised from $65 to $95 the sale of cheese dropped from 150 pounds to 80 pounds per day. What is the cross elasticity between wine and cheese?
answer
-1.62.
question
Given the cross elasticity between wine and cheese, as depicted on Graph C, we can say that
answer
"wine and cheese are complements."
question
If the resources needed to produce shoes are abundantly and easily available then the supply of shoes will be
answer
elastic.
question
The more time buyers have to react to a change in the price of product A
answer
the more elastic demand for product A will be.
question
If demand for a product is price inelastic the seller of that product can
answer
raise the price of the product in order to raise revenue.
question
On Graph B if price is reduced total revenue will
answer
fall.
question
On Graph C if price is reduced the price from $95 to $65 the total revenue generated will
answer
increase
question
Which of the two graphs, A or B, shows the demand for a product with many substitutes?
answer
A.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
