QUESTION 1

Fill in the blank:

If demand is elastic, then shifts in supply will have a _______effect on quantity than on price.

QUESTION 2

Fill in the blank:

If supply is inelastic, then shifts in demand will have a ________ effect on price than on quantity.

QUESTION 3

The demand for Woobles is unit elastic. When Woobles are priced at $20.00, 10 units are sold.If the price is increased to $40, how many units of Woobles will be sold?Show your work.

QUESTION 4

A 10% increase in income leads to a 15% decrease in the quantity of Ramen noodles demanded. Are Ramen noodles a normal good or an inferior good? Why?

QUESTION 5

A 10% increase in the price of soda leads to a 20 percent increase in the quantity of iced tea demanded. Calculate the cross-price elasticity of demand for iced tea. Show your work.

QUESTION 6

If cola and iced tea are good substitutes for consumers, what can be inferred about their cross-price elasticities?

QUESTION 7

Fill in the blank:

If supply is ______, then shifts in demand will have a larger effect on quantity than on price.

QUESTION 8

A 17% decrease in the price of bacon leads to a 14 percent increase in the quantity of bacon demanded. As a result, what will happen to total revenue?

QUESTION 9

Fill in the blank:

If demand is __________, then shifts in supply will have a larger effect on price than on quantity.

QUESTION 10

The price elasticity of demand for tickets to local baseball games is estimated to be equal to 0.89. In order to boost ticket revenues, should ticket prices be increased or decreased? Why?