question
the price elasticity of demand is measured by:
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dividing the percentage change in quantity demanded by the percentage change of the price
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If the price elasticity of demand = ∞, then this means that the demand curve is
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horizontal
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Gas prices recently increased by 25%. in response, purchases of gasoline decreased by 5%. based on this data, the price elasticity of demand for gasoline is
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0.2
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the price elasticity of demand along a demand curve with a constant slope:
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decreases in absolute value as quantity demand rises
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when a consumer consumes more of a good that has become cheaper in place of a good that has become relatively more expensive, this is known as the:
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substitution effect
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the price elasticity of demand for skiing lessons in New Hampshire is over 1.00. this means that the demand is __________ in New Hampshire
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price elastic
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suppose the price elasticity of demand for fishing lures equals 1 in south carolina and 0.63 in alabama. to increase revenue, fishing lure manufactures should
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leave prices the same in south carolina and raise prices in alabama
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what will lead to a decrease in total revenue
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the price increasing when the demand is price-elastic
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a shirt manufacturer sold 10 dozen shirts per day when the price was $4 per shirt and sold 10 dozen shirts per day when the price was $3 per shirt. the absolute value of the price elasticity of demand is:
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equal to zero
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the income effects of change in the price of a good are more important for goods that:
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take up a substantial share of consumer's spending
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if the price of a good is increaded by 15% and the quantity demanded changes by 20%, then the absolute value of the price elasticity of demand is equal to:
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approximately 1.33
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the ration of percentage change in the quantity demanded to the percent change in price is the:
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price elasticity of demand
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a rancher in oklahoma decides to raisee the price of his beef by 19% over what the prevailig market equals. If the demand for beef is perfectly elastic, the rancher's quantity of demand will:
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fall to 0
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On a linear demand curve:
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demand is elastic at high prices
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If a university decreases the price of tickets to football games to collect more revenue, it is assuming that the demand for tickets is :
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price-inelastic
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a demand curve that is perfectly inelastic is _________
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vertical
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If a 20% price increase generates a 20% price decrease in the quantity demanded , then this is a(n) _______ response
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unit-elastic
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The substitutional effect always involves change in consumption in the ________ direction of the __________ change
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opposite; price
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Sonik, a local wireless phone company, tested the effect of a price reduction for text messaging. it lowered prices from $0.08 to $0.04 per message and found that the number of messages sent tripled. this means ____________________
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the demand for test messaging is elastic in this price range
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the demand for strawberry icecream tends to be relatively price-elastic because:
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for most people there are many substitutes for strawberry icecream
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