Expert Answer:Supply and Demand: Elasticities

  

Solved by verified expert:write a paper about an article about Elasticities. You must provide me with a copy of the article and clearly mark the reference (the
source, the date, page number, etc.). The article may not be over 6 months old.
You must type up a one-half to one page discussion that describes how the issue
relates to the material we have covered in class (indicate this with a chapter number if
possible)(chapter 6).I attached my homework for chapter 6 so you can relate this article with the chapter Attached the 1 page writing and THE ACTUAL article Thank you so much
ch6.pdf

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Assignment Print View
1 of 10
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Score: 100
out of 100 points (100%)
award:
5 out of
5.00 points
In general, the greater the elasticity, the:
smaller the responsiveness of price to changes in quantity.
smaller the responsiveness of quantity to changes in price.
larger the responsiveness of price to changes in quantity.
larger the responsiveness of quantity to changes in price.
When either demand or supply is highly elastic, the quantity is very responsive to a change in price.
Multiple Choice
Learning Objective: 06-01 Use
elasticity to describe the
responsiveness of quantities to
Section: Price Elasticity of Demand
changes in price and distinguish five
elasticity terms.
award:
5 out of
5.00 points
The short-run elasticity of demand for gasoline sold at gasoline stations is 0.20. If terrorism causes the supply of
gasoline to fall, resulting in a 5 percent drop in quantity, if other things remain the same, the price per gallon will increase
by:
4 percent.
5 percent.
20 percent.
25 percent.
Price elasticity of demand = % change in quantity/% change in price, implying that 0.2 = 5%/x. Solving for the
percentage change in price, or x, yields the prediction of a 25 percent change in price.
Multiple Choice
Learning Objective: 06-01 Use
elasticity to describe the
responsiveness of quantities to
Section: Price Elasticity of Demand
changes in price and distinguish five
elasticity terms.
5/7/2015 10:31 PM
Assignment Print View
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5.00 points
If average movie attendance is 250 million when prices are $7 a ticket and 200 million when prices are $9 a ticket, the
elasticity of demand for movie tickets is about:
0.0.
0.9.
1.1.
1.8.
Elasticity = [(250 – 200)/225]/[(9- 7)/8] = 0.9. We state elasticity of demand as positive.
Multiple Choice
Learning Objective: 06-01 Use
elasticity to describe the
responsiveness of quantities to
Section: Price Elasticity of Demand
changes in price and distinguish five
elasticity terms.
award:
5 out of
5.00 points
Measuring the price of gasoline in dollars per quart, an economist calculates the price elasticity of demand to be 1. What
would the price elasticity of demand be if the economist had chosen to measure the price in dollars per gallon?
1
4
.25
.5
Elasticity is independent of units.
Multiple Choice
Learning Objective: 06-01 Use
elasticity to describe the
responsiveness of quantities to
Section: Price Elasticity of Demand
changes in price and distinguish five
elasticity terms.
5/7/2015 10:31 PM
Assignment Print View
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award:
5 out of
5.00 points
High gasoline prices hit commuters who live far from their jobs in areas with little public transportation hard. With few
alternatives, they just have to bear the higher cost. Based on this information, how would you characterize demand for
gasoline by these commuters?
Gasoline is a luxury good.
Gasoline is an inferior good.
Demand for gasoline is elastic.
Demand for gasoline is inelastic.
The scenario presented concerns only the effect of a change in price on quantity demanded; therefore, we cannot tell
whether gasoline is a luxury good or an inferior good. This would require knowing how a change in income affects
demand. Because quantity demanded is not responsive to change in price, demand is inelastic.
Multiple Choice
Learning Objective: 06-01 Use
elasticity to describe the
responsiveness of quantities to
Section: Price Elasticity of Demand
changes in price and distinguish five
elasticity terms.
award:
5 out of
5.00 points
If the elasticity of demand for electricity is 0.13, the demand for electricity is:
inelastic.
elastic.
perfectly inelastic.
unit elastic.
Inelastic points have elasticities less than 1.
Multiple Choice
Learning Objective: 06-01 Use
elasticity to describe the
Section: Price Elasticity of Demand
responsiveness of quantities to
changes in price and distinguish five
elasticity terms.
5/7/2015 10:31 PM
Assignment Print View
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award:
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5.00 points
George Davis and Michael Wohlgenant estimate that for every 1 percent increase in the price of Christmas trees,
quantity demanded falls by 0.6 percent. The demand for Christmas trees is:
inelastic.
elastic.
perfectly inelastic.
unit elastic.
Elasticity = .6/1 = .6. Inelastic points have elasticities less than 1.
Multiple Choice
Learning Objective: 06-01 Use
elasticity to describe the
responsiveness of quantities to
Section: Price Elasticity of Demand
changes in price and distinguish five
elasticity terms.
award:
5 out of
5.00 points
Refer to the graph shown. Which of the following curves demonstrates a perfectly elastic demand curve?
A
B
C
None of the curves
A perfectly elastic curve is horizontal because there is never any change in price.
Multiple Choice
Learning Objective: 06-01 Use
elasticity to describe the
responsiveness of quantities to
Section: Price Elasticity of Demand
changes in price and distinguish five
elasticity terms.
5/7/2015 10:31 PM
Assignment Print View
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award:
5 out of
5.00 points
Which of the following statements is true about a downward-sloping demand curve that is a straight line?
The slope and the elasticity are the same at all points.
The slope remains the same, but elasticity rises as you move down the demand curve.
The slope remains the same, but elasticity falls as you move down the demand curve.
The slope and the elasticity fall as you move down the demand curve.
The slope of a straight line is always the same, and the elasticity falls as one moves down the demand curve.
Multiple Choice
Learning Objective: 06-01 Use
elasticity to describe the
responsiveness of quantities to
Section: Price Elasticity of Demand
changes in price and distinguish five
elasticity terms.
award:
5 out of
5.00 points
Refer to the graph shown. Which supply curve is perfectly elastic?
A
B
C
D
Horizontal supply curves are perfectly elastic.
Multiple Choice
Learning Objective: 06-01 Use
elasticity to describe the
responsiveness of quantities to
Section: Price Elasticity of Supply
changes in price and distinguish five
elasticity terms.
5/7/2015 10:31 PM
Assignment Print View
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5.00 points
Refer to the following graph.
The demand curve with the greatest elasticity is:
A.
B.
C.
D.
D is perfectly elastic (elasticity is infinite).
Multiple Choice
Learning Objective: 06-01 Use
elasticity to describe the
responsiveness of quantities to
Section: Price Elasticity of Demand
changes in price and distinguish five
elasticity terms.
award:
5 out of
5.00 points
The demand for a good is elastic. Which of the following would be the most likely explanation for this?
The good is a necessity.
The good is broadly defined.
The good costs a large portion of one’s total income.
The time interval considered is short.
Demand for goods that costs a large portion of one’s total income tends to be price elastic.
Multiple Choice
Learning Objective: 06-02 Explain
the importance of substitution in
determining elasticity of supply and
demand.
Section: Price Elasticity of Demand
5/7/2015 10:31 PM
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Refer to the graph shown. Area F is:
smaller than areas B and C, because demand is elastic between $10 and $30.
larger than areas B and C, because demand is elastic between $10 and $30.
larger than areas B and C, because demand is inelastic between $10 and $30.
smaller than areas B and C, because demand is inelastic between $10 and $30.
Since at $30, the demand is unit elastic, at prices below $30, demand is inelastic and the revenue gained is larger
than the revenue lost when price rises from $10 to $30.
Multiple Choice
Learning Objective: 06-03 Relate
price elasticity of demand to total
revenue.
Section: Elasticity and Revenue
award:
5 out of
5.00 points
If an economist observed that higher hot dog prices lead to a decrease in the demand for chili, she most likely would
conclude that:
chili and hot dogs are complements.
chili and hot dogs are substitutes.
chili and hot dogs are both inferior goods.
chili and hot dogs are both normal goods.
If the price of a good rises, the demand for its complement will decrease because not only will people buy less of the
first good, they will buy less of the good that they consume with it (its complement).
Multiple Choice
Learning Objective: 06-04 Define
and calculate income elasticity and
cross-price elasticity of demand.
Section: Cross-Price Elasticity of
Demand
5/7/2015 10:31 PM
Assignment Print View
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5.00 points
If milk and cookies are complements and the price of cookies falls, we would expect to see:
an increase in the demand for milk.
a decrease in the demand for milk.
an increase in the quantity demanded for milk but no change in demand.
a decrease in the quantity demanded for milk but no change in demand.
If milk and cookies are complements, people tend to consume them together. Therefore, if the price of cookies falls,
the quantity of cookies demanded will rise. People will also demand more milk to go with their cookies.
Multiple Choice
Learning Objective: 06-04 Define
and calculate income elasticity and
cross-price elasticity of demand.
Section: Cross-Price Elasticity of
Demand
award:
5 out of
5.00 points
Refer to the following table to answer the question. Which of the following statements is true?
A and B are complements whereas A and C are substitutes.
A and C are complements whereas A and B are substitutes.
A and B are complements and A and C are complements.
A and B are substitutes and A and C are substitutes.
Cross-price elasticity of demand is negative for A and B. They are complements. Cross-price elasticity of demand is
positive for A and C. They are substitutes.
Multiple Choice
Learning Objective: 06-04 Define
and calculate income elasticity and
cross-price elasticity of demand.
Section: Cross-Price Elasticity of
Demand
5/7/2015 10:31 PM
Assignment Print View
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award:
5 out of
5.00 points
If frost in Florida reduces the quantity of vegetables sold by 20 percent and increases their retail price by 30 percent,
one can conclude that:
the demand has shifted to the right along a perfectly inelastic supply curve.
the demand has shifted to the right along a perfectly elastic supply curve.
the supply of vegetables has shifted to the left along an elastic demand curve.
the supply of vegetables has shifted to the left along an inelastic demand curve.
The freeze shifted the supply of vegetables to the left. Since the percentage change in price is greater than the
percentage change in quantity demanded, the demand for vegetables must be inelastic.
Multiple Choice
Learning Objective: 06-05 Explain
how the concept of elasticity makes
supply and demand analysis more
useful.
Section: Elasticity and Equilibrium
award:
5 out of
5.00 points
For which of the following goods is the demand curve likely to be most inelastic?
Hershey’s Symphony chocolate bar
chocolate bars with nuts
candy
chocolate bars
Candy, as a broadly defined good, has fewer substitutes than the other more specific items. Therefore, the demand
curve for candy is likely to be the most inelastic.
Multiple Choice
Learning Objective: 06-02 Explain
the importance of substitution in
determining elasticity of supply and
demand.
Section: Price Elasticity of Demand
award:
5 out of
5.00 points
Patrick McCarthy has estimated that on average, for every 1 percent increase in income, the quantity of European cars
demanded increases by 1.93 percent. From this information one can conclude that European cars are:
a luxury.
a necessity.
an inferior good.
a negative good.
Elasticity is 1.93. Since it is greater than 1, this is a luxury good.
Multiple Choice
Learning Objective: 06-04 Define
and calculate income elasticity and
cross-price elasticity of demand.
Section: Income Elasticity
5/7/2015 10:31 PM
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GreenTree Corporation sells live Christmas trees. It observes that when it increases the price of Christmas trees by 10
percent, revenue rises by 2.5 percent. The demand for Christmas trees is:
rev: 10_01_2013_QC_36724
inelastic.
elastic.
unit elastic.
perfectly elastic.
If revenue rises when price rises, demand must be inelastic.
Multiple Choice
Learning Objective: 06-03 Relate
price elasticity of demand to total
revenue.
Section: Elasticity and Revenue
5/7/2015 10:31 PM

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