Question

6.If price elasticity of demand of peaches is -5, then a 10% increase in the price of peaches would result in which of the following? (2 points)

a. Quantity demanded decreases by 2%

b. Quantity demanded decreases by 50%

c. Quantity demanded increases by 2%

d. Quantity demanded increases by 50%

9.Elasticity of demand depends on ______ while the elasticity of supply depends on _________ ? (2 points)

a. Poor availability of complementary goods ; How fast opportunity cost falls

b. Large availability of complementary goods ; How fast opportunity cost rises

c. Poor availability of substitute goods ; How fast opportunity cost rises

d. Large availability of substitute goods ; How fast opportunity cost rises

e. None of the above

10. Which of the following would you expect to have the least elastic demand? (Hint: For each option below, find out which one has the least number of substitutes ) (1 point)

a. Food

b. Bread

c. Multigrain bread

d. Multigrain grain bread from Ingles

e. All the above items will have the same elasticity of demand

11. What would happen in the market for oatmeal cookies if the price of multigrain cookies ( a substitute) increased and a huge flood destroys a significant portion of the wheat plants from which oats are made? ( 2 points) a. The equilibrium price of oats increases but the impact on equilibrium quantity is uncertain

b. The equilibrium price of oats decreases but the impact on equilibrium quantity is uncertain

c. The equilibrium quantity of oats increases but the impact on equilibrium price is uncertain

d. The equilibrium quantity of oats decreases but the impact on equilibrium price is uncertain

12..Which of the following options would make the demand for Hershey’s chocolate syrup more elastic? ( 2 points) a. An improvement in quality of Hershey’s chocolate syrup

b. Launching of five other chocolate syrups by five other companies

c. Hershey’s goes bankrupt

d. Chocolate syrup is found to increase the risk of diabete

Answer #1

**Question 6**

**b) Quantity demanded decreases by 50%**

Price elasticity if demand is a ratio of percentage change in quantity demanded by percentage change in price. In the question it is given that price elasticity of demand for peaches is -5. A negative value of price elasticity of demand shows the negative relationship between price and quantity demanded. Also it is given that there is a 10% increase in price of peaches.

Ep=%change in quantity demanded / %change in price

Therefore as price of peaches increases by 10%, the quantity demanded of peaches decreases by 50%

3.Factors that affect a product’s price elasticity of demand
are
A. availability of close substitutes.
B. passage of time.
C. necessity versus luxury.
D. definition of the market.
E. All of the above are correct.
4. If a price increase causes a decrease in total revenues
(total expenditures), then the product is considered to be
A. price elastic.
B. price inelastic.
C. unitary elastic.
D. All of the above are correct.
E.None of the above are correct.
5.Price elasticity of...

When there is a decrease in supply, all else held equal,
equilibrium price falls, demand increases, and equilibrium
quantity increases.
equilibrium price falls, demand does not change, and
equilibrium quantity increases.
equilibrium price rises, quantity demanded decreases, and
equilibrium quantity decreases.
equilibrium price falls, quantity demanded decreases, and
equilibrium quantity decreases.
equilibrium price rises, demand does not change, and
equilibrium quantity increases.

When the cross-price elasticity EPX = -3:
a. demand rises by 3% with a 1% increase in the price of X
b. the quanitty demanded decreases by 3% with a 1% increase in
the price of X
c. the quantity demanded rises by 1% with a 3% increase in the
price of X
d. demand decreases by 3% with a 1% increase in the price of
X

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...

As the price of pancakes decreased from $3 to $1 during winter,
the quantity demanded for maple syrup increased from 2 oz. to 3
oz.
Calculate the cross-price elasticity of demand for maple syrup
with respect to pancakes. (Points: 5)
Provide the correct formula
Show the procedure
State the correct answer, including correct sign and
magnitude
Interpret your elasticity value. (Points: 5)
Are pancakes a substitute or complementary
good? (Points: 4)

A measure of the rate of percentage change of quantity demanded
with respect to price, holding all other determinants of demand
constant is
a.
Income elasticity of demand
b.
Own price elasticity of demand
c.
Price elasticity of market equilibrium
d.
Cross price elasticity of demand
The value of the income elasticity of demand coefficient for
Good X is given as 0.1. This means that
a.
as income increases by 10 percent, quantity demanded rises by 1
percent.
b.
as income...

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...

1) The income elasticity of demand for Good Z is –0.2, while the
cross-price elasticity of demand between Good Z and Good Y is 1.63.
Which of the following statements is correct regarding Good Z?
Group of answer choices
Good Z is a inferior good, and Goods Z and Y are
complements.
Good Z is an inferior good, and Goods Z and Y are
substitutes.
Good Z is a normal good, and Goods Z and Y are complements.
Good Z...

When the price of a particular good increases
demand for normal goods rises.
demand for complementary goods falls.
demand for substitute goods falls.

QUESTION 36 The price elasticity of demand for Alpha personal
computer is estimated to be -2.0. If the price of the computers
decreases by 5%, what would be the expected percentage changes in
the quantity demanded and in the total revenue for the company? a)
Quantity demanded would decrease by 10% and total revenue would
decreases by 5%. b) Quantity demanded would increase by 10% and
total revenue would increases by 5%. c) Quantity demanded would
decrease by 10% and...

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