1.

As the number of substitutes for a particular product decreases, the price elasticity of demand for the product (increase or decrease)?

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2.

Willie's widgets currently sell for $20 each. At thatprice, Willie has sold 36,000 widgets. Willie would like to maximize hisrevenue, so he raises the price of a widget to $22 each. Willie has seen the sales of his widgets drop only slightly to 33,000.

Using theinitial-value method, the price elasticity of demand forWillie's widgets is (_______) (Enter your response as an absolute value rounded to two decimalplaces.)

We can conclude that the demand forWillie's widgets under these conditions is;

A. unit elastic.

B. inelastic.

C. perfectly inelastic.

D. elastic.

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3.

When the price is $12, the quantity demanded is 100 units. When the price rises to $14, the quantity demand falls to 80 units.

The price elasticity of demand using theinitial-value method is (_______) (Enter your response as an absolute value rounded to two decimalplaces.)

The price elasticity of demand using the midpoint method is (_______) (Enter your response as an absolute value rounded to two decimalplaces.)

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4.

If the price elasticity of demand for stuffed snowmen is 0.65 and the quantity demanded decreased by 5%, then the price of stuffed snowmen increased by (_______) %. (Enter your response rounded to two decimalplaces.)

5.

Suppose we are on the upper portion of a linear demand curve. If the price increases by 10 percent, the quantity demanded will decrease by (more than or less than) 10 percent.

In thiscase, total revenue will (increase or decrease)?

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6.

If a 10 percent decrease in the price of natural gas decreases the quantity of residential electricity demanded by 15 percent, thecross-price elasticity is (_______) (Enter your response rounded to two decimal places.)

In thiscase, natural gas and residential electricity are considered (substitutes or complements)?

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7.

The price elasticity of supply is 0.82 for apple pies. If the price of apple pies increases by 3%, the quantity supplied will increase by (_______) %. (Enter your response rounded to two decimalplaces.)

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8.

Addrisi Pasta is currently in equilibrium where they supply50,000 one-pound boxes of spaghetti at a price of $1.10 per box. The price elasticity of demand for Addrisi Pasta is 1.23 and the price elasticity of supply for the pasta is 0.82. Thisquarter, demand for the pasta has increased by 8%.

The new equilibrium price will be ($_______)(Enter your response rounded to two decimalplaces.)

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9.

The Cleveland metropolitan area is expected to experience a decline in population by3% over the next 10 years. The housing price elasticity of supply in the Cleveland area is 4.6 and the housing price elasticity of demand in the Cleveland area is 0.6.

Once the populationdeclines, the equilibrium price of housing should drop by (_______) % in the Cleveland metro area.(Enter your response rounded to two decimalplaces.)