Chapter 5 Econ Quiz

A 10 percent increase in income leads to a 15% decrease in the quantity of macaroni and cheese demanded but no change in the price of macaroni and cheese. From this information, we can assume:

macaroni is an inferior good and price elasticity of supply is infinite.

total revenue equals

price x quantity sold

Suppose the New Orleans Saints lowers ticket prices by 13 percent and as a result the quantity of tickets demanded increases by 21 percent. This response means that the price elasticity of demand for Saints tickets is

elastic

The elasticity of supply is defined as the ________ change in quantity supplied divided by the _______ change in price.

percentage; percentage

If the price of a scooter increases by 20 percent and the quantity supplied of scooters increases by 30 percent, then the price elasticity of supply is

1.5

When the percentage change in the quantity demanded is greater than the percentage change in price, then price elasticity of demand is

elastic

The price elasticity of demand is a measure of

buyers' responsiveness to changes in the price of a product.

During January of 2007, the average price of regular unleaded gasoline in Oakland, California increased 11.0 percent. If the price elasticity of demand for gasoline was 0.13, the price hike means that the quantity demanded decreased by

1.43 percent

If the demand for insulin is inelastic, an increase in insulin prices leads to

more total revenue for insulin makers