Micro 2.5-Other Elasticities Open Practice

1

Suppose the price of cereal rose by 25% and the quantity of milk sold decreased by 50%. Then we know that the:

cross-price elasticity between cereal and milk is –2.

cross-price elasticity between cereal and milk is –0.5.

price elasticity of demand for milk is 2.

cross-price elasticity of demand for milk is 2.

price elasticity of demand for cereal is 0.5.

1

If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when your income increases from $19,000 to $21,000 a year, other things equal, then, for you, shoes are considered a(n):

1

Suppose the cross-price elasticity between demand for Burger King burgers and the price of McDonald's burgers is 0.8. If McDonald's increases the price of its burgers by 10%, then:

Burger King will sell 10% more burgers.

Burger King will sell 8% more burgers.

Burger King will sell 8% fewer burgers.

McDonald's will sell 8% fewer burgers.

Burger King will sell 80% more burgers.

1

Suppose you manage a convenience mart and are in charge of ordering products but do not set the price. In your area, the income elasticity of demand for peanut butter is –0.5. Due to local factory closings, you expect local incomes to decrease by 20%, on average, in the next month. As a result, you should stock:

20% more peanut butter on the shelves.

5% less peanut butter on the shelves.

10% more peanut butter on the shelves.

10% less peanut butter on the shelves.

20% less peanut butter on the shelves.

1

For which of the following is the cross-price elasticity of demand most likely a large positive number?

1

If your income increases and your consumption of bagels increases, other things equal, bagels are considered a(n):

1

The cross-price elasticity of electricity with respect to the price of natural gas has been estimated as being equal to 0.2. This implies that:

natural gas and electricity are both normal goods.

electricity and natural gas are complements.

electricity and natural gas are both luxury goods.

one of the two goods is inferior while the other is normal, but we need additional information to determine which of them is inferior.

electricity and natural gas are substitutes.

1

If the income elasticity of demand for a good is positive, the good is said to be a(n):

1

Based on data in the table above, use the midpoint method to determine the cross elasticity of demand for ice cream and cake.

the cross elasticity is –0.75

the cross elasticity is –1.75

the cross elasticity is –0.83

the cross elasticity is –4.0

the cross elasticity is –1.33

1

Micro 2.5-Other Elasticities Open Practice

Suppose the price of cereal rose by 25% and the quantity of milk sold decreased by 50%. Then we know that the:

If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when your income increases from $19,000 to $21,000 a year, other things equal, then, for you, shoes are considered a(n):

Suppose the cross-price elasticity between demand for Burger King burgers and the price of McDonald's burgers is 0.8. If McDonald's increases the price of its burgers by 10%, then:

For which of the following is the cross-price elasticity of demand most likely a large positive number?

If your income increases and your consumption of bagels increases, other things equal, bagels are considered a(n):

The cross-price elasticity of electricity with respect to the price of natural gas has been estimated as being equal to 0.2. This implies that:

If the income elasticity of demand for a good is positive, the good is said to be a(n):

Based on data in the table above, use the midpoint method to determine the cross elasticity of demand for ice cream and cake.

Johnson's income elasticity of demand for steaks is:

Suppose the price of cereal rose by 25% and the quantity of milk sold decreased by 50%. Then we know that the:

If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when your income increases from $19,000 to $21,000 a year, other things equal, then, for you, shoes are considered a(n):

Suppose the cross-price elasticity between demand for Burger King burgers and the price of McDonald's burgers is 0.8. If McDonald's increases the price of its burgers by 10%, then:

For which of the following is the cross-price elasticity of demand most likely a large positive number?

If your income increases and your consumption of bagels increases, other things equal, bagels are considered a(n):

The cross-price elasticity of electricity with respect to the price of natural gas has been estimated as being equal to 0.2. This implies that:

If the income elasticity of demand for a good is positive, the good is said to be a(n):

Based on data in the table above, use the midpoint method to determine the cross elasticity of demand for ice cream and cake.

Johnson's income elasticity of demand for steaks is: