Survey Of Economics
10th Edition
ISBN: 9781337111522
Author: Tucker, Irvin B.
Publisher: Cengage,
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 5, Problem 5SQ
To determine
The change in elasticity in a long run.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
For a particular good, a 10 percent increase in price causes a 15 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
A. There are no close substitutes for this good.
B. The good is a necessity.
C. The market for the good is broadly defined.
D. The relevant time horizon is long.
Choose a good or service you are familiar with. It should be something that is currently available for purchase. If your classmates would be unfamiliar with this good or service, provide a brief description.
Initial Response: Complete all items below:
1) Choose the most likely demand shifter (the things that shift demand) for your product and explain why and how the demand curve is most likely to shift if there is a change in that demand shifter. If the demand curve shifts in the way you are suggesting, what will happen to equilibrium price and quantity?
2) Choose the most likely supply shifter (the things that shift supply) for your product and explain why and how the supply curve is most likely to shift if there is a change in that supply shifter. If the supply curve shifts in the way you are suggesting what will happen to equilibrium price and quantity?
3) If both the supply and demand curves shift in the way you suggested in #1 & #2 above, what will happen to equilibrium…
Which of the following statements is true?
a. The more substitutes there are for a good the more inelastic will be its demand.
b. If a good is largely purchased by the wealthy it tends to be elastic.
c. The more time that has elapsed since a price change, the more elastic the demand will be for that good.
d. All of the above are correct.
e. Both a and b are correct.
f. Both a and c are correct.
g. Both b and c are correct.
h. None of the above is correct.
Chapter 5 Solutions
Survey Of Economics
Ch. 5.3 - According to the previous discussion, what factors...Ch. 5 - Prob. 1SQPCh. 5 - Prob. 2SQPCh. 5 - Prob. 3SQPCh. 5 - Prob. 4SQPCh. 5 - Suppose a university raises its tuition from 3,000...Ch. 5 - Prob. 6SQPCh. 5 - Suppose a movie theater raises the price of...Ch. 5 - Charles loves Mello Yello and will spend 10 per...Ch. 5 - Prob. 9SQP
Ch. 5 - Prob. 10SQPCh. 5 - Prob. 11SQPCh. 5 - Prob. 12SQPCh. 5 - Prob. 1SQCh. 5 - Prob. 2SQCh. 5 - Prob. 3SQCh. 5 - Prob. 4SQCh. 5 - Prob. 5SQCh. 5 - If a decrease in the price of movie tickets...Ch. 5 - Prob. 7SQCh. 5 - Prob. 8SQCh. 5 - Prob. 9SQCh. 5 - Along a segment of the demand curve where the...Ch. 5 - Prob. 11SQCh. 5 - Prob. 12SQCh. 5 - Prob. 13SQCh. 5 - Prob. 14SQCh. 5 - Prob. 15SQCh. 5 - Prob. 16SQCh. 5 - Prob. 17SQCh. 5 - Prob. 18SQCh. 5 - Prob. 19SQCh. 5 - Prob. 20SQCh. 5 - Prob. 21SQ
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- For a particular good, 10% increase in price causes a 5% decrease in quantity demanded. Which of the following statements is most likely applicable to this good? a. The good is a luxury b. The market for the good is broadly defined c. there are many close substitutes for this good d. The relevant time horizon is longarrow_forwardA government is considering placing a tax on alcohol consumption (demand-side) with the goal of raising revenue in order to finance health care benefits such as Medicare. People who support the tax argue that the demand for alcohol is price inelastic in the short-run. Which of the following statements is true? a.This is a very good way to raise revenue both in the short term and in the long term because there are no substitutes for alcohol. b.No tax revenue can be raised in this way because alcohol sellers will just lower their price by the amount of the tax, and therefore the consumer price of alcohol will not change. c.This tax will not raise much revenue either in the short term or the long term because demand is price inelastic. d.The alcohol tax will raise a lot of revenue in the short-run, but it may not raise as much revenue in the long-run since people will substitute away from alcohol, making the long-run demand for alcohol more elastic.arrow_forwardWhich of the following statements is not true? a. When price elasticity of demand is very high, we say there is brand loyalty. b. Price elasticity of demand for basic foods is low. c. When goods have very low prices, the elasticity of demand is usually quite low. d. The availability and price of substitutes affect the elasticity of demand for a good or servicearrow_forward
- For a particular good, a 12 percent increase in price causes a 24 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good? a. The good is a luxury. b. There are not many substitutes for this good. c. The relevant time horizon is short. d. The market for the good is broadly defined.arrow_forwardConsider some determinants of the price elasticity of demand: • The availability of close substitutes • Whether the good is a necessity or a luxury • How broadly you define the market • The time horizon being considered A good with many close substitutes is likely to have relatively demand, since consumers can easily choose to purchase one of the close substitutes if the price of the good rises. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the most elastic demand? O Sports car O Amputation procedures for diabetes sufferers The price elasticity of demand for a good also depends on how you define the good. Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have demand that falls in between.arrow_forwardFor a particular good, a 2 percent increase in price causes a 12 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good? A. the good is a luxury B. the market for the good is broadly defined C. the relevant time horizon is short D. there are no good substitutes for this goodarrow_forward
- How will the elasticity of demand be affected in the following cases? A. More substitutes become available. B. The income elasticity decreases.arrow_forwardWhich of the following is the best example of the concept of demand? Your car breaks down and you consider how to deal with the fact that you no longer have transportation Since you cannot get to school today, you are considering skipping class You are thinking about getting a new car, and really like the new Ford Bronco. You really like the new Ford Bronco, but don't have the $45,000 to buy one, so instead, you decide to get a used SUV that costs $15,000. None of the above is a good example of demand.arrow_forwardB) When the price of Good A is $27, the quantity demanded of Good B is 1,200 units. When the price of Good A falls to $23 the quantity demanded of Good B falls to 800 units. i. Calculate the cross elasticity of demand ii. Are the goods substitutes or complements? Explain your choice. iii. Explain how cross elasticity of demand is used. vi. Explain how income elasticity of demand is used.arrow_forward
- If the quantity demanded of widgets drops by 10% in response to a 20% decrease in the price of gadgets: a. Widgets and gadgets are complements, with a cross-price elasticity of demand of -2. b. Widgets and gadgets are substitutes, with a cross-price elasticity of demand of 10. c. Widgets and gadgets are substitutes, with a cross-price elasticity of demand of 2. d. Widgets and gadgets are substitutes, with a cross-price elasticity of demand of 0.5. e. Widgets and gadgets are complements, with a cross-price elasticity of demand of -0.5.arrow_forwardSuppose the price elasticity of supply for a good is 2.0. This means ... Group of answer choices The supply of this good is elastic. Inputs used to produce this good are probably plentiful and/or cheap. The supply of this good is elastic. Inputs used to produce this good are probably rare and/or expensive. The supply of this good is inelastic. Inputs used to produce this good are probably plentiful and/or cheap. No answer text provided. The supply of this good is inelastic. Inputs used to produce this good are probably rare and/or expensive.arrow_forwardI need help answering number 4 and 5.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
How To Understand Elasticity (Economics); Author: Market Power;https://www.youtube.com/watch?v=1XXhpHJTglg;License: Standard Youtube License