Question

1. If the price elasticity of demand for cigarettes is 0.55, and the price of cigarettes increases by 10 percent, then the quantity of cigarettes demanded will fall by what percent?

2. If the price elasticity of demand for chicken is 2, then a 20% decrease in the price of chicken will lead to what percentage increase in the quantity demanded of chicken?

3. When the price of NBA tickets is $25 each, 30,000 tickets are sold. After the price rises to $30 each, 20,000 tickets are sold. At the original price, is the demand for NBA tickets elastic or inelastic, and why?

Answer #1

In each case below, what is the value of the price elasticity
of demand? Is demand perfectly inelastic, inelastic, unit elastic,
elastic or perfectly elastic?
Price falls by 10%, quantity demanded rises by 8%
Price rises by 3%, quantity demanded falls by 3%
Price rises by 1%, quantity demanded falls by 5%
Price rises by 5%, quantity demanded collapses to zero
Price falls by 2%, quantity demanded does not change

Determine the price elasticity of demand, the cross-price
elasticity of demand or the income elasticity in the following
scenarios.
a. Consider the market for coffee. Suppose the price rises from
$4 to $6 and quantity demanded falls from 120 to 80. What is price
elasticity of demand? Is coffee elastic or inelastic?
b. John’s income rises from $20,000 to $22,000 and the quantity
of hamburger he buys each week falls from 2 pounds to 1 pound. What
is his income...

Assume economists have determined that the price elasticity of
demand for housing in a given range of the demand curve is -1.75.
Suppose that the price of housing increases by 10 percent.
Given the value of price elasticity of demand, is
demand for housing elastic or inelastic in the given range of the
demand curve?
What happens to quantity demanded of housing (what is the
percentage change in the quantity demanded of housing) as
price of housing increases by 10%?...

1-The price elasticity of demand for furniture is estimated at
1.3. This value means a one percent increase in the
A.price of furniture will decrease the quantity of furniture
demanded by 1.3 percent.
B.price of furniture will increase the quantity of furniture
demanded by 1.3 percent.
C.quantity of furniture demanded will decrease the price of
furniture by 1.3 percent.
D.quantity of furniture demanded will increase the price of
furniture by 1.3 percent.
2.An advance in technology lowers the price of...

1-As we move up the demand curve, the price elasticity of demand
* A) increases B) decreases C) becomes unitary D) does not
change
2-If the price of lemonade increases relative to the price of
grape juice, the demand for: * A) grape juice will decrease. B)
grape juice will increase. C) lemonade will decrease. D) lemonade
will increase.
3-An increase in price will result in no change in total revenue
if: * A) the percentage change in price is...

1. What is the numerical value for the price elasticity of
demand if a price change causes no change in quantity
demanded?________ What is the numerical value for elasticity of
demand if a price change causes no change in total revenue?________
What is the elasticity of demand for a horizontal demand
curve?________ What is the elasticity of demand if a price increase
leads to an increase in total revenue? elastic /
inelastic. What is the numerical value for the elasticity...

1. When elasticity of demand is equal to one and the change in
the quantity demanded and the change in price are exactly
proportional. This type of elasticity is described as ________.
A. elastic
B. inelastic
C. unitary elastic
2. What happens to total revenue (TR) if the price rises on a
product with demand that is price elastic?
A. Total revenue will rise.
B. Total revenue will remain the same.
C. Total revenue will fall.

1) Using the midpoint method, the price elasticity of demand is
determined to be about 0.85. If there is a 10% decrease in the
quantity demanded of the product then what effect would this have
on the price of the product?
A decrease in the price of the product from $8.50 to $10
A 11.8% increase in the price of the product
An increase in the price of the product from $8.50 to $10
2)The ________ is negative for complementary...

Assume the price elasticity of demand for a good is –1.23. The
demand for this good is _______ which means the percentage change
in quantity demanded (in absolute value) is _______ the percentage
change in price (in absolute value).
Group of answer choices
elastic, larger than
elastic, smaller than
inelastic, smaller than
inelastic, larger than

Are cigarettes relatively demand elastic or demand inelastic?
Explain using the determinants of price elasticity of demand. Does
the burden of cigarette taxes fall more heavily on buyers or
sellers? Explain. Do you think that higher cigarette taxes will
deter more people from smoking?

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