Question

Suppose that when the price of water rises by 30 percent, the quantity demanded falls by 10 percent. The price elasticity of demand for water is ____________, making water an _______________ good (in this example).

Answer #1

Ans) Price elasticity of demand is the responsiveness of quantity demanded to change in price. If price elasticity is negative, good is normal good. PED is positive for veblen and giffens good, as they defy law of demand.

Further, if PED is less than 1, good is inelastic. If PED is 1, good is unit elastic and if PED is more than 1, good is elastic.

PED = % change in quantity demanded ÷ %change in price

PED = (-10%)/(30%) = -0.33

Therefore, water has PED of **-0.33** ,making water
**inelastic good.**

When the price is $2, quantity demanded is 10. When the price
rises to $8, quantity demanded falls to 2.
What is the value of the elasticity of demand? Is it elastic or
inelastic?

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...

8.
When the price increases by 30 percent and the quantity demanded
drops by 30 percent, the price elasticity of demand is
unitary elastic.
elastic.
perfectly inelastic.
inelastic.
perfectly inelastic.
9.
If the cross-price elasticity of demand between Good A and Good
B is 2 and the percentage change in price of Good A is 5 percent,
what is the percentage change in quantity demanded of Good B?
-3 percent
1.50 percent
10 percent
3 percent
-1.25 percent

Suppose that when the price of good A rises from $18 to $20, the
quantity demanded of good B falls from 30 units to 20 units.
Using the midpoint method, the cross-price elasticity of demand
is
Select one: a. -0.26, where goods A and B are complements.
b. -0.26, where goods A and B are substitutes.
c. -3.8, where goods A and B are complements.
d. -3.8, where goods A and B are substitutes.

When the price of doodads falls from $16 to $10 the quantity of
doodads demanded rises from 150 to 160 units.
a) Compute and categorize the elasticity of demand of
doodads.
b) Interpret the number you calculated in part (a) for the
elasticity of demand for doodads.
c) If the government placed an excise tax on doodads, who would
pay the majority of that tax: consumers or firms? Explain verbally
(no graph required).

When the price of a cruise rises from $19,500 to $20,500, the
quantity demanded decreases from 2,100 to 1,900 travelers.
Use this information to calculate the price elasticity of
demand.
The percentage change in the price of a cruise is——？
The percentage change in the quantity of cruises demanded is
——？percent.
>>> Report your answer as a positive number.
The price elasticity of demand for cruises is——?

The quantity of aggregate goods and services demanded rises when
the
a. price level rises, because the interest rate falls. b. price
level falls, because the interest rate falls. c. price level falls,
because the interest rate rises. d. price level rises, because the
interest rate rises.

1.If price rises by 20% and quantity demanded of rice falls by
100 pounds, the elasticity of demand is : (1 point)
a. greater than 1
b. equal to -5
c. equal to -20
d. cannot be determined without additional information.
2.If quantity supplied responds only slightly to a change in
price, then: (1 point)
a. Supply is elastic
b. An increase in price will shift the supply curve to a large
extent
c. Supply is inelastic
d. Supply is...

2.) For a certain good, when the good’s price falls from $22 to
$20, its quantity demanded rises from 2,000 to 2,200 units. Given
this information, find the price elasticity of demand two different
ways. First, use the elasticity of demand formula. Second, use the
total revenue test. You must use both methods. show all work for
credit.

II-0. Suppose that your demand schedule for Movie is as
below.
Price
Quantity Demanded when income =$10,000
Quantity Demanded when income =$20,000
$5
50
60
$7
40
55
$9
30
50
$11
20
45
$13
10
40
Now the movie ticket price is $7 each. If the ticket price rises
to $9 each,
Calculate the price elasticity of demand using midpoint method
when your income is $10,000.
Step 1
How much is the change in quantity
demanded?
What is the...

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