Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Textbook Question
Chapter 5, Problem 5SQ
- a. Over time, people’s incomes rise.
- b. If price rises, over time, producers will be able to offer more substitutes.
- c. Over time, the good will become a smaller and smaller share of people’s budgets.
- d. People see fewer and fewer substitutes for the good in the long run.
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Students have asked these similar questions
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.
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 long
The demand for a good will be less price elastic,
Select one:
a. The larger is the percentage of income spent on it
b. The higher is its price
c. The smaller the supply of the good
d. The fewer the substitutes available for the good
e. The fewer there are complements for the good
Chapter 5 Solutions
Micro Economics For Today
Ch. 5.3 - According to the previous discussion, what factors...Ch. 5 - If the price of a good or service increases and...Ch. 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. 13SQPCh. 5 - Consider the following supply schedule: What is...Ch. 5 - Prob. 15SQPCh. 5 - Prob. 16SQPCh. 5 - A perfectly elastic demand curve has an elasticity...Ch. 5 - Prob. 2SQCh. 5 - Prob. 3SQCh. 5 - Prob. 4SQCh. 5 - Price elasticity of demand tends to be larger in...Ch. 5 - If a decrease in the price of movie tickets...Ch. 5 - Prob. 7SQCh. 5 - The president of Tucker Motors says, Lowering the...Ch. 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 - Suppose Sally buys exactly five bars of English...Ch. 5 - Prob. 18SQCh. 5 - Prob. 19SQCh. 5 - Prob. 20SQCh. 5 - If bus travel is an inferior good, its income...Ch. 5 - Prob. 22SQCh. 5 - If automobiles and gasoline are complements, then...Ch. 5 - Suppose that when price is 10, quantity supplied...Ch. 5 - Prob. 25SQ
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- Which 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_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 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_forward
- How will the elasticity of demand be affected in the following cases? A. More substitutes become available. B. The income elasticity decreases.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_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
- Suppose 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_forwardStep 1 Analyze gasoline price hike statistics in the following scenario. In June 2008, the U.S. retail gas price jumped from $3 to $4 a gallon. This is a 33% increase in price from January 2008. During that time, the total quantity of gasoline purchased fell by 3%. Supplies of gasoline produced also decreased from 1 million barrels to 800,000 barrels. No viable substitute has been created to replace gasoline. Step 2 Calculate the price elasticity of gasoline Be sure to show all work. Calculate the price elasticity of demand for gasoline. Calculate the elasticity of supply using the information provided. Calculate the changes in consumer and producer surplus. Because there is no viable substitute for gasoline at this time, what can you say about the cross-elasticity and income elasticity of supply and demand for gasoline? Is the demand for gasoline elastic, inelastic, perfectly elastic or inelastic, or unit elastic? Use the following as a guide for your calculation To show…arrow_forwarda. The supply curve for televisions is given by QS=−20+4P where QS represents the quantity of televisions supplied and P is the price of televisions. The market demand for televisions is given by QD=400−10P where QD is the demand for televisions. Find the equilibrium price and quantity of televisions. b. Using the equations in part (a), calculate the price elasticity of demand for televisions when price changes to $25. c. Describe what will occur if price falls fellow equilibrium price calculated in part (a). How will this situation will be corrected?arrow_forward
- a. Why do suppliers want to create more inelastic demand relationships in the products that they sell? b. When the price of cellphone charges rises from $480 to $600 a month, the quantity demanded decreases from 204 million to 196 million subscribers. Calculate the price elasticity of demand for cellphone charges. Is the demand for elastic or inelastic? Would the demand for Flow charges be more elastic or less elastic than the demand for overall cellphone charges? Why?arrow_forwardFor a particular good, a 10 percent increase in price causes a 3 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good? a. The relevant time horizon is short. b. The good is a luxury. c. The market for the good is narrowly defined. d. There are many close substitutes for this good. Selected Answer: C. Carrow_forwardMatch each of the terms to their definition or description. (NOTE: This question is in reference to Cross-Price Elasticity and Income Elasticity.) Complements Inferior good Normal Good Substitutes A. as incomes increase, demand decreases; Income elasticity less than zero B. goods that have a cross-price elasticity less than zero C. as incomes increase, demand increases; Income elasticity greater than zero D. goods that have a cross-price elasticity greater than zeroarrow_forward
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How To Understand Elasticity (Economics); Author: Market Power;https://www.youtube.com/watch?v=1XXhpHJTglg;License: Standard Youtube License