If the government provides a subsidy to the producers of coffee and simultaneously charges a tax on tea, which of the following can (but not necessarily will) happen in the market for coffee? * The equilibrium price and quantity both decrease. The equilibrium price increases and the equilibrium quantity decreases. The equilibrium price stays the same and equilibrium quantity decreases. The equilibrium price stays the same and equilibrium quantity increases. O The equilibrium price decreases and the quantity stays the same. Income elasticity measures the responsiveness of * changes in income to changes in price. changes in quantity demanded to a change in income. changes in quantity demanded to a change in price. changes in income to changes in supply. All of the above.

In the coffee market, you notice that when the price of a kilo of coffeechanged from $28 to $16 the quantity of coffee supplied changed from 65to 40 kilos, all else held constant. What is (own) price elasticity of supplyfor coffee?

How is the price elasticity of demand measured? The price elasticity of demand is measured as A. the percentage change in the quantity supplied divided by the percentage change in the quantity demanded. B. the change in the quantity demanded divided by the change in price. c. the slope of the demand curve. D. the percentage change in the quantity demanded divided by the percentage change in price. O E. the quantity demanded divided by price. O O O O

Assume that when the price of cantaloupes is $2.50 the demand for cantaloupes is unit-elastic, and that the demand curve for cantaloupes is linear and downward sloping. If firms lower the price of cantaloupes to $2.00 which of the following statements can be made regarding the price elasticity of demand for cantaloupes? O The demand for cantaloupes at $2.00 must be inelastic. O We cannot determine whether the demand for cantaloupes is elastic or inelastic without knowing what the quantity demanded is at each price. O The demand for cantaloupes at $2.00 must be elastic. O The demand for cantaloupes at $2.00 must be unit-elastic.