CB2400 Tick Learn ELASTICITY 2014 8 1

Topics: Supply and demand, Elasticity, Price elasticity of demand Pages: 4 (640 words) Published: November 25, 2014
CB2400 Micro-Economics

Tick & Learn

Elasticity

Intended Learning Outcomes

The “Tick & Learn” questions help you attain the following intended learning outcomes:

Identify concept(s) you have learned which is (are) relevant to each question. Use the concept(s) to analyze each question.

Notes to Students

Attempt all questions and discuss your answers with your tutor and classmates in tutorials.

1)The price elasticity of demand measures
A)how often the price of a good changes.
B)the slope of a budget curve.
C)how sensitive the quantity demanded is to changes in demand. D)the responsiveness of the quantity demanded to changes in price.

2)If a rightward shift of the supply curve leads to a 6 percent decrease in the price and a 5 percent increase in the quantity demanded, the price elasticity of demand is _____. We can conclude that the elasticity of demand is _____ A)0.30; inelastic.

B)0.60; elastic.
C)0.83; inelastic.
D)1.20; high.

Price
(dollars per bushel)
Quantity demanded (bushels)
8
2,000
7
4,000
6
6,000
5
8,000
4
10,000
3
12,000

3)The table above gives the demand schedule for snow peas. The price elasticity of demand increased from $6.00 to $7.00 per bushel is (please use point elasticity of demand in your calculation) A)1.0.

B)2.0.
C)2.6.
D)5.0.

4)At a local ice cream parlor, when the price of half-gallons of chocolate ice cream was lowered by fifty cents per half-gallon, total revenue from the sale of chocolate ice cream decreased. This result indicates that A)there are more people who like vanilla ice cream than there are people who like chocolate ice cream. B)the demand for chocolate ice cream is inelastic.

C)the demand for chocolate ice cream is elastic.
D)None of the above answers are correct.

5)The more substitutes available for a product,
A)the larger is it's the price elasticity of demand.
B)the smaller is its income elasticity of demand.
C)the...
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