Econ Elasticity mc – Flashcards
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The larger the coefficient of price elasticity of demand for a product, the:
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smaller the resulting price change for an increase in supply
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A leftward shift in the supply curve of a product X will increase equilibrium price to a greater extent the:
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more inelastic the demand for the product
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The diagram shows two product demand curves. On the basis of this diagram, we can say that:
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over the range P1P2 price elasticity of demand is greater for D1 than for D2
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Refer to the diagram. Between prices of $5.70 and $6.30:
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D1 is more elastic than D2
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Refer to the diagram and assume a single good. If the price of the good decreases from $6.30 to $5.70, consumer expenditure would:
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decrease if demand were only D2
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Refer to the data. The price elasticity of demand is relatively elastic:
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in the $6-$4 price range.
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Refer to the data. The price elasticity is relatively inelastic:
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in the $3-$1 price range
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In which price range of the accompanying demand schedule is demand elastic?
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$1-$3
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Suppose the total revenue curve is derived from a particular linear demand curve. That demand curve must be:
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elastic for price increases that reduce quantity demanded from 4 units to 3 units.
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If a firm's demand for labor is elastic, a union-negotiated wage increase will:
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cause the firm's total payroll to decline
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The illinois central railroad once asked the illinois commerce commision for permission to increase its commuter rates by 20%. The railroad argued that declining revenues made this rate increase essential. Opponents of the rate increase contended that the railroad's revenues would fall because of the rate hike. It can be concluded that:
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the railroad felt that demand for passenger service was inelastic and opponents of the rate increase felt that it was elastic.
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Refer to the diagram. Which is a rectangular hyperbola, that is, a curve such that each rectangle drawn from any point on the curve will be of identical area. If this rectangular hyperbola was a demand curve, we could say that it would be:
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of unit elasticity throughout.
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Refer to the diagram. Which rectangular hyperbola, that is, a curve such that each rectangle drawn from any point on the curve will be of identical area. In comparing the price elasticity and the slope of this demand curve, we can conclude that the:
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slope of the curve varies, but its elasticity is constant.
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Refer to the diagram. In the P1 to P2 price range, we can say:
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that demand is elastic with respect to price.
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Refer to the diagram. If price falls from $10 to $2, total revenue:
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falls from A+B to B+C and demand is inelastic.
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Suppose the supply of product X is perfectly inelastic. If there is an increase in the demand for this product, equilibrium price:
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will increase, but equilibrium quantity will be unchanged.
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The diagram concerns supply adjustments to an increase in demand (D1 to D2) in the immediate market period, the short run, and the long run. In the immediate market period, the increase in demand will:
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increase equilibrium price, but not equilibrium quantity.
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The diagram concerns supply adjustments to an increase in demand (D1 to D2) in the immediate market period, the short run, and the long run. In the long run, the increase in demand will:
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increase both equilibrium price and quantity.
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If the supply of product X is perfectly elastic, and increase in demand for it will increase:
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equilibrium quantity, but equilibrium price will be unchanged.
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For an increase in demand, the price effect is smallest and quantity effect is largest:
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in the long run.
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A supply curve that is parallel to the horizontal axis suggests that:
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a change in demand will change the equilibrium quantity, but not price.
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An increase in demand will increase equilibrium price to a greater extent:
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the less elastic the supply curve.
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Refer to the information and assume that stadium capacity is 5,000. If the Mudhens' management wanted a full house for the game, it would:
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set ticket price to $5.
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An anti drug policy that reduces the supply of heroin might:
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increase street crime because the addicts demand for heroin is highly inelastic.
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Studies of the minimum wage suggest that the price elasticity of demand for teenage workers is relatively inelastic. This means that:
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an increase in the minimum wage would increase the total incomes for teen workers as a group.
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Refer to the data. Suppose quantity demanded increased by 12 units at each price, changing the equilibrium price in a direction and an amount for you to determine. Over that price range, supply is:
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inelastic.
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Refer to the data. Suppose quantity supplied declined by 23 units at each price, changing the equilibrium price in a direction and amount for you to determine. Over that price range, demand is:
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inelastic.
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The price of old baseball cards rises rapidly with increases in demand because:
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the supply of old baseball cards is price inelastic.
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The diagram suggests that:
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X and Y are independent goods.
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We would expect the cross elasticity of demand for pepsi to be greater in relation to other soft drinks than that for soft drinks in general because:
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there are fewer good substitutes for soft drinks as a whole than for pepsi specifically.
