ECON 222 Exam 2

The price elasticity of demand is a measure of the:

We use the midpoint formula in computing the price elasticity of demand coefficient in order to:

The price-elasticity of demand is always negative because of:

When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. The price-elasticity of demand coefficient for this product is:

If the price-elasticity coefficient for a good is .75, the demand for that good is described as:

If a 5 percent cut in the price of a product causes the quantity demanded to rise by 10 percent, the demand is:

Blossom, Inc. sells 500 bottles of perfume a month when the price is $7. A huge increase in resource costs forces Blossom to raise price to $9, and the firm only manages to sell 460 bottles of perfume. The price elasticity of demand is:

Suppose you are given the following data on demand for a product. The price elasticity of demand (based on the midpoint formula) when price decreases from $9 to $7 is:

If an increase in the supply of a product in the market results in a decrease in price, but no change in the quantity traded, then:

Total revenue falls as the price of a good is raised, if the demand for the good is:

Demand is said to be inelastic when:

When the price of movie tickets in a certain town was reduced, the movie-theaters' revenues did not change. This suggests that the demand for movie tickets in that town has a price-elasticity coefficient of:

Chuck Grim has a price elasticity of demand for beer of 1.2. Suppose that the price of beer is increased by 10 percent. What will happen to the total amount Chuck spends on beer?

In some markets consumers may buy many different brands of a product. Which of the statements below best represents a situation where demand for a particular brand would be very elastic?

Which is not characteristic of a product with relatively inelastic demand?

What is the most likely effect of the development of DVDs, rental movies, and online movie streaming on the movie theater industry?

The demand for Cheerios cereal is more price-elastic than the demand for cereals as a whole. This is best explained by the fact that:

The price elasticity of demand increases with the length of the period considered because:

A state government wants to increase the taxes on cigarettes to increase tax revenue. Because cigarettes are addictive, we would expect its demand to be:

Considering the price-elasticity of demand for wheat, we would expect that if the supply of wheat increases, other factors constant, then wheat farmers' total revenues would:

The elasticity of supply for a product will be 2 if:

If a product has a short-run elasticity of supply equal to zero, then an increase in the demand for the product will:

If a college admits only a fixed number of applicants every year, then the school's supply curve for admissions is:

In the immediate market period for a highly-perishable crop like tomatoes, the individual farmer's supply curve tends to be:

Economists distinguish among the immediate market period, the short run, and the long run by noting that:

Elasticity of supply will increase when:

The price of gold is often volatile because:

Airlines charge business travelers more than leisure travelers because there is a more:

If a 10 percent increase in the price of one good A results in an increase of 5 percent in the quantity demanded of another good B, then it can be concluded that the two goods A and B are:

Cross elasticity of demand is:

The cross elasticity of demand between Quaker State motor oil and Texaco motor oil is likely to be:

The cross elasticity of demand between digital cameras and memory cards is likely to be:

Most goods can be classified as normal goods rather than inferior goods. The definition of a normal good suggests that:

A negative income elasticity of demand coefficient indicates that:

For which product is the income elasticity of demand most likely to be negative?