Question

When the cross-price elasticity E_{PX} = -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

Answer #1

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...

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...

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...

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...

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...

7) A government wants to reduce electricity consumption by 20%.
The price elasticity of demand for electricity is -5. The
government must ________ the price of electricity by ________.
a) raise; 4.0%
b) raise; 0.25%
c) raise; 1.25%
d) lower; 0.25%
8) If the quantity demanded of Sony PS3 decreased by 8% when the
price of Nintendo Wii decreases by 16%, the cross price elasticity
of demand between PS3 and wii is
a) 0.5.
b) -5.
c) -2
d) 2...

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...

If the cross-price elasticity of demand between Good A and Good
B is 3, the price of Good B increases, and the price elasticity of
demand for Good B is inelastic, we can expect to see a ________
change in the quantity demanded for Good A.
a.positive, zero
b.positive, small
c.positive, large
d.negative, one-for-one negative,
e.infinite

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...

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...

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