An increase in the price of a commodity when demand is inelastic causes the total expenditures of consumers of the commodity to (a) increase, (b) decrease, (c) remain unchanged, or (d) any of the above
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An increase in the
commodity to (a) increase, (b) decrease, (c) remain unchanged, or (d) any of the above
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- A fall in the price of a commodity whose demand curve is a rectangular hyperbola causes total expenditures on thecommodity to (a) increase, (b) decrease, (c) remain unchanged, or (d) any of the aboveThe cross price elasticity between gasoline and driving is Group of answer choices is positive so they are complements. is negative so they are substitutes is positive so they are substitutes. is negative so they are complements none of the above.The price of product X is reduced from $150 to $140 and, as a result, the quantity demanded increases from 20 to 24 units. Therefore, demand for X in this price range Multiple Choice has declined. is of unit elasticity. is inelastic.
- Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.2. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 10%, it should increase the price by . If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be than the effect 3 months from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. Teenagers do not have as much income as adults, so they are more price sensitive. It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes. Adults are more likely to be addicted to cigarettes.The demand for a product is unit elastic. At a price of $20, 10 units of a product are sold. If the price is increased to $40, then one would expect sales to equal: Group of answer choices 20 units. 10 units. 5 units. 0 units.Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.5. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 30%, it should increase the price by . If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be than the effect 5 years from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes. Adults are more likely to be addicted to cigarettes. Teenagers do not have as much income as adults, so they are more price sensitive.
- Suppose the price of a can of soup is $1.30 and the quantity demanded is 9. When the price increases to $1.50, the quantity demanded drops to 7. Using the mid-point method, what is the price elasticity of demand? Multiple Choice a. 1.75 b. 0.57 c. −1.75 d. −0.57The longer the time period under study, a. the more inelastic is the price elasticity of demand. b. the more likely any given price cut will result in a smaller reaction by the consumer. c. the less sensitive consumers will be to price changes. d. the more elastic is the price elasticity of demand.The demand equation for cans of chicken is Qd= 60-3p Suppose the price of a can of chicken increases from $5 to $10. The price elasticity of demand is _________ (use decimals if necessary). We classify this price elasticity of demand as ____ over the $5 to $10 price change. A. Elastic B.Inelastic C.Unit elastic
- if the income elasticity of the product is less than 1. During an economic crisis a reasonable manager will likely a. Realize that it is an inferior good and will request BOT to convert the product to a normal good b. Request for an increase in production c. All of the choices are reasonable d. In an economic crisis, a good manager need to conduct analysis and evaluation. We cannot manage what we cannot measure. e. Request for a decrease in productionThe price elasticity of demand for holidays in Italy is likely to be high because: Group of answer choices people tend to book up a long time in advance. there are plenty of different holidays abroad to choose from. expenditure on holidays account for a relatively small part of people’s total income. holidays at home provide no real alternative. people need a holiday if they are to cope with the year ahead – and they prefer holidays abroad.Suppose you're trying to compare the year-to-year performance of one of your regional salespeople over a period during which income grew by 3%. If demand for your products has an income elasticity of 2, how would you measure the salesperson's performance?
