Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 5, Problem 4CQQ
To determine
The elasticity and market entry and exist.
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The demand for a product is likely to be more elastic:
A. when a product is a necessity.
B. the less time that passes.
C. when a product has more substitutes available.
D. when the market for a product is less narrowly defined.
E. both a and b.
During Ramadan season, stores give a lot of discounts and enjoy huge sales and profits. This is because their products have_____.
a.
Inelastic demand
b.
Unitary elastic demand
c.
Elastic demand
d.
Perfectly Inelastic demand
An increase in demand will have a ____ effect on price and a ____ effect on output when supply is relatively elastic.a. larger; smallerb. larger; largerc. smaller; largerd. smaller; smaller
Chapter 5 Solutions
Essentials of Economics (MindTap Course List)
Ch. 5.1 - Define the price elasticity of demand. Explain...Ch. 5.2 - Define the price elasticity of supply. Explain...Ch. 5.3 - Prob. 3QQCh. 5 - A life-saving medicine without any close...Ch. 5 - The price of a good rises from 8 to 12, and the...Ch. 5 - A linear, downward-sloping demand curve is a....Ch. 5 - Prob. 4CQQCh. 5 - An increase in the supply of a good will decrease...Ch. 5 - Over time, technological advance increases...Ch. 5 - Prob. 1QR
Ch. 5 - List and explain the four determinants of the...Ch. 5 - Prob. 3QRCh. 5 - Prob. 4QRCh. 5 - Prob. 5QRCh. 5 - What do we call a good with an income elasticity...Ch. 5 - How is the price elasticity of supply calculated?...Ch. 5 - Prob. 8QRCh. 5 - Prob. 9QRCh. 5 - Prob. 1PACh. 5 - Prob. 2PACh. 5 - Suppose the price elasticity of demand for heating...Ch. 5 - A price change causes the quantity demanded of a...Ch. 5 - Prob. 5PACh. 5 - The price of coffee rose sharply last month, while...Ch. 5 - Suppose that your demand schedule for pizza is as...Ch. 5 - The New York Times reported (Feb. 17, 1996) that...Ch. 5 - Prob. 9PACh. 5 - Prob. 10PACh. 5 - You are the curator of a museum. The museum is...Ch. 5 - Prob. 12PA
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- Choose the letter of the correct answer. ____1. It is designed to measure the response of quantity demanded when price changes. A. Elasticity C. Elastic B. Elasticity of Demand D. Elasticity of Supply ____2. It is the ratio or percentage in quantity to a percentage change in price along the given supply curve. A. Elasticity of Demand C. Price Elasticity of Supply B. Elasticity of Supply D. Price Elasticity of Demand ____3. It focuses on the analysis of the behavior of individual economic agents. A. Economics C. Macroeconomics B. Macro aspect D. Microeconomics ____4. It refers to the number of goods and services that a consumer is willing able to purchase. A. Concept of Supply C. Elasticity of Demand B. Concept of Demand D. Elasticity of Supply ____5. It refers to the number of goods and services that a firm is willing and able to offer for sale. A.…arrow_forwardAn increase in the price of pure chocolate morsels from $2.25 to $2.45 causes suppliers of chocolate morsels to increase their quantity supplied from 125 bags per minute to 145 bags per minute. Supply is Select one: a. elastic and the price elasticity of supply is 1.74. b. elastic and the price elasticity of supply is 0.57. c. inelastic and the price elasticity of supply is 1.74. d. inelastic and the price elasticity of supply is 0.57.arrow_forwardB. The supply of zucchini is very elastic in the short run. Draw a diagram that shows how the equilibrium price and quantity change as demand changes due to a food safety scare affecting yellow squasharrow_forward
- An increase in the supply of grain will reduce thetotal revenue grain producers receive ifa. the supply curve is inelastic.b. the supply curve is elastic.c. the demand curve is inelastic.d. the demand curve is elastic.arrow_forwardPrice elasticity of supply is always positive except when supply is a. perfectly inelastic. b. relatively elastic. c. either relatively elastic or relatively inelastic. d. relatively inelastic.arrow_forwardIf the price elasticity of supply for a good is 0.48, then this means that A. the supply is inelastic and therefore the demand must also be inelastic. B. a 10 percent increase in price results in a 4.8 percentage increase in quantity supplied. C. a 10 percent price increase results in a 4.8 percentage decrease in quantity supplied. D. the supply is elastic. E. the percentage increase in quantity supplied is greater than the percentage increase in price.arrow_forward
- II. Elasticity a. When is demand perfectly elastic? When is demand perfectly inelastic? What are the values of the price elasticity of demand when demand is perfectly elastic or perfectly inelastic? What do perfectly elastic and perfectly inelastic demand curves look like? b. Suppose the price of gasoline in July 2019 averaged $2.35 a gallon and 15 million gallons a day were sold. In October 2019, the price averaged $3.05 a gallon and 14 million gallons were sold. If the demand for gasoline did not shift between these two months, use the midpoint formula to calculate the price elasticity of demand. Indicate whether demand was elastic or inelastic. c. A study of the effects of the minimum wage on employment of low-skilled workers estimated the price elasticity of demand for low-skilled workers is -0.75. Suppose that the government is considering raising the minimum wage from $7.25 per hour to $7.75 per hour. Based on this information, calculate the percentage change in the employment of…arrow_forwardThe price of apples increases by 7.2%, and the quantity supplied increases by 7.2%. What is the elasticity of supply and is it elastic, inelastic, or unit elastic? The quantity demanded of legos increases by 7.5% when the price decreases by 5%. What is the elasticity of demand and is it elastic, inelastic, or unit elastic?arrow_forwardAn economist observes the following: A price of the good increased a little and as a result total revenue of the firm increased. Which of the following could explain this observation A. Demand is perfectly elastic B. Demand is perfectly inelastic C. Demand is unit-elasticarrow_forward
- Draw the curve for the following cases: a. perfectly elastic demand b. perfectly inelastic demand c. elastic demand d. inelastic demand e. unit-elastic demand. . please the graph and cuve must be cmputerize. no hand writing please dont draw in handwritingarrow_forwardProblems 1. The equation for a demand curve is P = 48 – 3Q. What is the elasticity in moving from a quantity of 5 to a quantity of 6? 2. The equation for a demand curve is P = 2/Q. What is the elasticity of demand as price falls from 5 to 4? What is the elasticity of demand as the price falls from 9 to 8? Would you expect these answers to be the same? 3. The equation for a supply curve is 4P = Q. What is the elasticity of supply as price rises from 3 to 4? What is the elasticity of supply as the price rises from 7 to 8? Would you expect these answers to be the same? 4. The equation for a supply curve is P = 3Q - 8. What is the elasticity in moving from a price of 4 to a price of 7?arrow_forwardIn the graph, when the elasticity moves to the left means : a. Unit in demand or supply inelastic b. Unit in supply perfectly elastic c. Unit in demand elastic d. Unit in supply elasticarrow_forward
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