Quantitative Demand Analysis - Assignment Essays

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Suppose as a result of a 5% increase in the price of pizza, the

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...

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Elasticity measures the responsiveness of

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one variable to changes in another.

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If elasticity is given by, EX,Y = %ΔX%ΔY%ΔX%ΔY, then elasticity is positive when:

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an increase in Y leads to an increase in X.
a decrease in Y leads to a decrease in X.

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Suppose elasticity is given by, EX,Y = %ΔX%ΔY%ΔX%ΔY.
The absolute value of elasticity will be ________ 1 when the change in X is large relative to the change in Y.

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greater than

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Which of the following is the formula of price elasticity of demand for a good, X?

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%changeQd / % change Px

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If ||EQ,P||EQ,P> 1, then demand is said to be ________.

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elastic

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The primary analytic tool used to evaluate the responsiveness of one variable to change in another variable is called ______.

answer

elasticity

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If ||EQ,Px||EQ,Px= 1, total revenue is _____.

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maximized

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If elasticity is given by, EX,Y = %ΔX%ΔY%ΔX%ΔY, then elasticity is negative when:

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a decrease in Y produces an increase in X.
an increase in Y produces a decrease in X.

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Suppose elasticity is given by, EX,Y = %ΔX%ΔY%ΔX%ΔY.
The absolute value of elasticity will be ________ 1 when the change in X is small relative to the change in Y.

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less than

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Given a demand function, Qxd = f(Px, Py, M, H), define own price elasticity.

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...

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If ||EQ,P||EQ,P= 1, then demand is said to be ________ elastic.

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unitary

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If ||EQ,Px||EQ,Px > 1, an increase in the price of a good will _______ total revenue.

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decrease

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If demand is inelastic, a(n) in price will lead to an increase in total revenue.

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Blank 1: increase or rise

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If ||EQ,Px||EQ,Px=∞, then demand is said to be perfectly _____.

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elastic

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What is true of demand for a good that has many available substitutes?

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Demand is relatively elastic.

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If ||EQ,P||EQ,P< 1, then demand is said to be ________.

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inelastic

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Demand tends to be ___________ elastic when consumers have more time to react to price changes.

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Total revenue is maximized at a point where demand is

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unitary elastic.

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If ||EQ,Px||EQ,Px= 0, then demand is said to be perfectly _________.

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inelastic

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Demand tends to be ___________ elastic for goods that require a relatively small portion of consumers' budgets and ____________ elastic for goods that require a relatively large portion of consumers' budgets.

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less; more

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Consider the following relationship between marginal revenue and elasticity of demand: MR = P × {1+EE}1+EE.
If demand is inelastic:

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Marginal revenue is negative.

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What is true of demand for a good that has few close substitutes?

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Demand is relatively inelastic.

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When consumers have more time to react to a price change of a good,

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the consumers are able to locate more substitutes.
the demand for the good becomes relatively more elastic.

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If demand is elastic, a(n) in price will lead to an increase in total revenue.

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Blank 1: decrease, reduction, lowering, fall, drop, decline, or cut

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Total revenue is maximized when marginal revenue equals which is when the own price elasticity of demand is equal to .

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Blank 1: zero or 0
Blank 2: -1, negative one, unit elastic, or unitary elastic

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True or false: A new car is likely to have a more elastic demand than paper clips.

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True

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Consider the following relationship between marginal revenue and elasticity of demand: MR = P × {1+EE}1+EE.
If demand is elastic:

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Marginal revenue is positive.

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Cross-price elasticity is given by which of the following expressions?

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%change Qx^d / % change Py

(Qx^d/Py) x (Py/Qx)

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Suppose as a result of a 5% increase in the price of pizza, the demand for soft drinks decreases by 1.1%. In this example, soft drinks and pizza are ____________.

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complements

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Consider the following relationship between marginal revenue and elasticity of demand: MR = P × {1+EE}1+EE.
If elasticity is unitary, marginal revenue is ___________ and total revenue is ____________.

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zero; maximized

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Suppose a firm produces two products, X and Y. The firm earns revenues from X equal to $50,000 and revenues from Y equal to $30,000. The own price elasticity of demand for X is -2 and the cross-price elasticity of demand between X and Y is -0.6. If the firm lowers the price of product X by 1%, the change in total revenues will be $. (Do not add any negative sign before your answer.)

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Blank 1: 680

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Income elasticity tells us whether goods are

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normal or inferior

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Responsiveness of demand for a good due to changes in the price of a related good is measured using

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cross-price elasticity.

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What can be said about goods X and Y if the cross-price elasticity between X and Y is negative?

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They are complements.

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Total revenue is maximized when marginal revenue equals which is when the own price elasticity of demand is equal to . (Enter a number in both blanks.)

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Blank 1: zero or 0
Blank 2: -1, negative one, unit elastic, or unitary elastic

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Suppose a firm produces two products, X and Y. The firm earns revenues from X equal to $70,000 and revenues from Y equal to $60,000. The own price elasticity of demand for X is -1.5 and the cross-price elasticity of demand between X and Y is -0.80. If the firm decreases the price of product X by 1%, the change in total revenues will be $.

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Blank 1: 830

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Which of the following are considered expressions for income elasticity?

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...

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If income elasticity of good X is negative, (EQx, M < 0), then good X is considered a(n) good.

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Blank 1: inferior

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Cross advertising elasticity measures

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changes in consumption of one good due to changes in advertising on another good.

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Suppose that demand is linear and given by:

Qxd = α0 - αxPx + αyPy + αMM + αHH

Cross-price elasticity is given by:

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αy × PyQx

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If income elasticity of good X is positive, (EQx, M > 0), then good X is considered a(n) good.

answer

Blank 1: normal

question

Advertising elasticity measures

answer

changes in consumption due to changes in advertising

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Suppose that demand is linear and given by:

Qxd = αo - αxPx + αyPy + αMM + αHH

Own price elasticity is given by:

answer

αx × PxQx

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Suppose the demand for good X is log-linear and given by

lnQxd = β0 + βxlnPx + βylnPy + βMlnM + βHlnH

Own price elasticity is

answer

βx

question

Suppose that demand is linear and given by:

Qxd = αo - αxPx + αyPy + αMM + αHH

Income elasticity is given by:

answer

αM × MQx

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Suppose the demand for good X is log-linear and given by

lnQxd = β0 + βxlnPx + βylnPy + βMlnM + βHlnH

Cross-price elasticity is

answer

βy

question

Suppose the demand for good X is log-linear and given by

lnQxd = β0 + βxlnPx + βylnPy + βMlnM + βHlnH

Income elasticity is

answer

βM

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...

answer

...

1 of 49

question

Suppose as a result of a 5% increase in the price of pizza, the

answer

...

question

Elasticity measures the responsiveness of

answer

one variable to changes in another.

question

If elasticity is given by, EX,Y = %ΔX%ΔY%ΔX%ΔY, then elasticity is positive when:

answer

an increase in Y leads to an increase in X.
a decrease in Y leads to a decrease in X.

question

Suppose elasticity is given by, EX,Y = %ΔX%ΔY%ΔX%ΔY.
The absolute value of elasticity will be ________ 1 when the change in X is large relative to the change in Y.

answer

greater than

question

Which of the following is the formula of price elasticity of demand for a good, X?

answer

%changeQd / % change Px

question

If ||EQ,P||EQ,P> 1, then demand is said to be ________.

answer

elastic

question

The primary analytic tool used to evaluate the responsiveness of one variable to change in another variable is called ______.

answer

elasticity

question

If ||EQ,Px||EQ,Px= 1, total revenue is _____.

answer

maximized

question

If elasticity is given by, EX,Y = %ΔX%ΔY%ΔX%ΔY, then elasticity is negative when:

answer

a decrease in Y produces an increase in X.
an increase in Y produces a decrease in X.

question

Suppose elasticity is given by, EX,Y = %ΔX%ΔY%ΔX%ΔY.
The absolute value of elasticity will be ________ 1 when the change in X is small relative to the change in Y.

answer

less than

question

Given a demand function, Qxd = f(Px, Py, M, H), define own price elasticity.

answer

...

question

If ||EQ,P||EQ,P= 1, then demand is said to be ________ elastic.

answer

unitary

question

If ||EQ,Px||EQ,Px > 1, an increase in the price of a good will _______ total revenue.

answer

decrease

question

If demand is inelastic, a(n) in price will lead to an increase in total revenue.

answer

Blank 1: increase or rise

question

If ||EQ,Px||EQ,Px=∞, then demand is said to be perfectly _____.

answer

elastic

question

What is true of demand for a good that has many available substitutes?

answer

Demand is relatively elastic.

question

If ||EQ,P||EQ,P< 1, then demand is said to be ________.

answer

inelastic

question

Demand tends to be ___________ elastic when consumers have more time to react to price changes.

answer

question

Total revenue is maximized at a point where demand is

answer

unitary elastic.

question

If ||EQ,Px||EQ,Px= 0, then demand is said to be perfectly _________.

answer

inelastic

question

answer

less; more

question

Consider the following relationship between marginal revenue and elasticity of demand: MR = P × {1+EE}1+EE.
If demand is inelastic:

answer

Marginal revenue is negative.

question

What is true of demand for a good that has few close substitutes?

answer

Demand is relatively inelastic.

question

When consumers have more time to react to a price change of a good,

answer

the consumers are able to locate more substitutes.
the demand for the good becomes relatively more elastic.

question

If demand is elastic, a(n) in price will lead to an increase in total revenue.

answer

Blank 1: decrease, reduction, lowering, fall, drop, decline, or cut

question

Total revenue is maximized when marginal revenue equals which is when the own price elasticity of demand is equal to .

answer

Blank 1: zero or 0
Blank 2: -1, negative one, unit elastic, or unitary elastic

question

True or false: A new car is likely to have a more elastic demand than paper clips.

answer

True

question

Consider the following relationship between marginal revenue and elasticity of demand: MR = P × {1+EE}1+EE.
If demand is elastic:

answer

Marginal revenue is positive.

question

Cross-price elasticity is given by which of the following expressions?

answer

%change Qx^d / % change Py

(Qx^d/Py) x (Py/Qx)

question

Suppose as a result of a 5% increase in the price of pizza, the demand for soft drinks decreases by 1.1%. In this example, soft drinks and pizza are ____________.

answer

complements

question

answer

zero; maximized

question

answer

Blank 1: 680

question

Income elasticity tells us whether goods are

answer

normal or inferior

question

Responsiveness of demand for a good due to changes in the price of a related good is measured using

answer

cross-price elasticity.

question

What can be said about goods X and Y if the cross-price elasticity between X and Y is negative?

answer

They are complements.

question

Total revenue is maximized when marginal revenue equals which is when the own price elasticity of demand is equal to . (Enter a number in both blanks.)

answer

Blank 1: zero or 0
Blank 2: -1, negative one, unit elastic, or unitary elastic

question

answer

Blank 1: 830

question

Which of the following are considered expressions for income elasticity?

answer

...

question

If income elasticity of good X is negative, (EQx, M < 0), then good X is considered a(n) good.

answer

Blank 1: inferior

question

Cross advertising elasticity measures

answer

changes in consumption of one good due to changes in advertising on another good.

question

Suppose that demand is linear and given by:

Qxd = α0 - αxPx + αyPy + αMM + αHH

Cross-price elasticity is given by:

answer

αy × PyQx

question

If income elasticity of good X is positive, (EQx, M > 0), then good X is considered a(n) good.

answer

Blank 1: normal

question

Advertising elasticity measures

answer

changes in consumption due to changes in advertising

question

Suppose that demand is linear and given by:

Qxd = αo - αxPx + αyPy + αMM + αHH

Own price elasticity is given by:

answer

αx × PxQx

question

Suppose the demand for good X is log-linear and given by

lnQxd = β0 + βxlnPx + βylnPy + βMlnM + βHlnH

Own price elasticity is

answer

βx

question

Suppose that demand is linear and given by:

Qxd = αo - αxPx + αyPy + αMM + αHH

Income elasticity is given by:

answer

αM × MQx

question

Suppose the demand for good X is log-linear and given by

lnQxd = β0 + βxlnPx + βylnPy + βMlnM + βHlnH

Cross-price elasticity is

answer

βy

question

Suppose the demand for good X is log-linear and given by

lnQxd = β0 + βxlnPx + βylnPy + βMlnM + βHlnH

Income elasticity is

answer

βM

question

...

answer

...

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