Inelastic Case Study
Graphed, using standard economic conventions, a demand curve that is perfectly inelastic is
upward sloping – incorrect
vertical
horizontal
downward sloping
You have just calculated the elasticity of demand to be 1. In this case, we would not expect any change in Total Revenue. True –correct False
Mario loves chocolate ice cream. The price of a single scoop of ice cream at his favorite ice cream shop just increased from $1 to $1.20
Mario's Demand Schedule for Chocolate Ice Cream Price Quantity Demanded per Week $1 8 $1.20 7
Which statement best describes Mario's elasticity …show more content…
of Demand?
There is not enough information to determine his elasticity of demand.
Mario’s demand for chocolate ice cream is unit elastic. - incorrect
Mario’s demand for chocolate ice cream is somewhat elastic.
Mario’s demand for chocolate ice cream is rather inelastic.
The price of a product increased. When the price increased, the calculated value of the elasticity of demand was 2.
In this case, you would expect the Total Revenue to decrease. True False -incorrect
A satellite radio company recently increased the price for basic service. A news report stated, "While the satellite company has increase their rates 20% and they are reporting a 30% increase in total revenue." This comment suggests that demand for satellite radio is inelastic. True -correct False
You have been working steadily for the past several years; earning about $50,000 a year. Now, you find yourself out of work. You receive $1,000 a month in unemployment compensation.
It is likely that you will now consume a higher quantity of goods you might, under normal circumstances, consider to be inferior goods. True –correct False
You have just finished calculating the elasticity of demand and found it to be 1. From this you know
this particular price change will result in an increase in Total Revenue.
this particular price change will result in a decrease in Total
Revenue.
this particular price change will have no impact on Total Revenue(TR): TR will remain unchanged.
- correct
You work for a utility firm. You have calculated the cross-price elasticity between electricity and natural gas to be 0.3. Which of the following statements is true?
Electricity and natural gas are complementary goods.
The cross-price elasticity results indicate consumers have an elastic demand for electricity and natural gas.
The cross-price elasticity results indicate consumers have an inelastic demand for electricity and natural gas. – incorrect
Electricity and natural gas are substitutes.
Which of the following statements is FALSE?
Time generally has little impact on elasticity of supply or demand.
Items that are considered essential for survival, such as food and water generally have rather inelastic values for elasticity of demand.- incorrect
Consumers demand for luxury items, such as yachts and expensive jewelry, tends to be highly elastic.
The availability and number of substitutes has an impact on our elasticity of demand.
You have just calculated the income elasticity of going to the
upward sloping – incorrect
vertical
horizontal
downward sloping
You have just calculated the elasticity of demand to be 1. In this case, we would not expect any change in Total Revenue. True –correct False
Mario loves chocolate ice cream. The price of a single scoop of ice cream at his favorite ice cream shop just increased from $1 to $1.20
Mario's Demand Schedule for Chocolate Ice Cream Price Quantity Demanded per Week $1 8 $1.20 7
Which statement best describes Mario's elasticity …show more content…
of Demand?
There is not enough information to determine his elasticity of demand.
Mario’s demand for chocolate ice cream is unit elastic. - incorrect
Mario’s demand for chocolate ice cream is somewhat elastic.
Mario’s demand for chocolate ice cream is rather inelastic.
The price of a product increased. When the price increased, the calculated value of the elasticity of demand was 2.
In this case, you would expect the Total Revenue to decrease. True False -incorrect
A satellite radio company recently increased the price for basic service. A news report stated, "While the satellite company has increase their rates 20% and they are reporting a 30% increase in total revenue." This comment suggests that demand for satellite radio is inelastic. True -correct False
You have been working steadily for the past several years; earning about $50,000 a year. Now, you find yourself out of work. You receive $1,000 a month in unemployment compensation.
It is likely that you will now consume a higher quantity of goods you might, under normal circumstances, consider to be inferior goods. True –correct False
You have just finished calculating the elasticity of demand and found it to be 1. From this you know
this particular price change will result in an increase in Total Revenue.
this particular price change will result in a decrease in Total
Revenue.
this particular price change will have no impact on Total Revenue(TR): TR will remain unchanged.
- correct
You work for a utility firm. You have calculated the cross-price elasticity between electricity and natural gas to be 0.3. Which of the following statements is true?
Electricity and natural gas are complementary goods.
The cross-price elasticity results indicate consumers have an elastic demand for electricity and natural gas.
The cross-price elasticity results indicate consumers have an inelastic demand for electricity and natural gas. – incorrect
Electricity and natural gas are substitutes.
Which of the following statements is FALSE?
Time generally has little impact on elasticity of supply or demand.
Items that are considered essential for survival, such as food and water generally have rather inelastic values for elasticity of demand.- incorrect
Consumers demand for luxury items, such as yachts and expensive jewelry, tends to be highly elastic.
The availability and number of substitutes has an impact on our elasticity of demand.
You have just calculated the income elasticity of going to the