Question : 51) When the price of pistachio nuts $7.50 per lb. : 1245206

51) When the price of pistachio nuts is $7.50 per lb. the quantity demanded is 48 lbs. When the price of peaches is $9.00 per lb. the quantity demanded is 40 lbs. When the midpoint formula is used to measure the price elasticity of demand we can say that the demand for pistachio nuts is

A) relatively, but not perfectly, elastic.

B) unit-elastic.

C) completely inelastic.

D) relatively, but not perfectly, inelastic.

52) 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?

A) The demand for cantaloupes at $2.00 must be inelastic.

B) We cannot determine whether the demand for cantaloupes is elastic or inelastic without knowing what the quantity demanded is at each price.

C) The demand for cantaloupes at $2.00 must be elastic.

D) The demand for cantaloupes at $2.00 must be unit-elastic.

53) Assume that the demand curve for sunblock is linear and downward sloping. Which of the following statements about the slope of the demand curve for sunblock and the price elasticity of demand for sunblock are true?

A) The slope and the price elasticity of demand are constant at all points along the demand curve for sunblock.

B) The slope is constant, but the price elasticity of demand is not constant at all points along the demand curve for sunblock.

C) The slope is not constant, but the price elasticity of demand is constant at all points along the demand curve for sunblock.

D) The slope of the demand curve for sunblock is constant and equal to zero; demand is perfectly inelastic.

54) If the percentage change in the quantity of teapots demanded is greater than the percentage change in the price of teapots, then

A) the price elasticity of demand for teapots is greater than 1 in absolute value.

B) the demand for teapots is unit-elastic.

C) the price elasticity of demand for teapots is equal to zero.

D) the price elasticity of demand for teapots is less than 1 in absolute value.

55) We should never assume that an inelastic demand curve is a perfectly inelastic demand curve because

A) there has never been evidence of a perfectly inelastic demand curve.

B) an inelastic demand curve may be perfectly inelastic at some times but not others.

C) perfectly inelastic demand curves are rare.

D) an inelastic demand curve may be elastic at high prices.

Table 7-7

Price

Quantity

$35

40

  25

50

56) Refer to Table 7-7. Suppose you own a bookstore. You believe that you can sell 40 copies per day of the latest John Grisham novel when the price is $35. You consider lowering the price to $25 and believe this will increase the quantity sold to 50 books per day. Compute the price elasticity of demand using the mid-point formula and these data. Select the correct implication from your work.

A) The demand for the John Grisham book is inelastic. Revenue will fall if the price is lowered.

B) The demand for the John Grisham book is elastic. Revenue will rise if the price is lowered.

C) The demand for the John Grisham book is inelastic. Revenue will rise if the price is lowered.

D) The demand for the John Grisham book is elastic. Revenue will fall if the price is lowered.

57) Of the following, which is the best example of good with a perfectly inelastic demand?

A) the demand for tickets in New York City when the Mets or Yankees are in the World Series

B) the demand for gasoline

C) a diabetic’s demand for insulin

D) the demand for a college education by a student who has a full scholarship to an Ivy League school

58) A perfectly elastic demand curve is

A) vertical.

B) horizontal.

C) curvilinear.

D) upward sloping.

59) A newspaper story on the effect of higher milk prices on the market for ice cream contained

the following:

“As a result [of the increase in milk prices], retail prices for ice cream are up 4 percent from last year.. . . And ice cream consumption is down 3 percent.”

Based on the information given, what is the price elasticity of demand for ice cream?

A) 0.75 (in absolute value)

B) 1.33 (in absolute value)

C) 12%

D) We do not have enough information to calculate the elasticity.

60) Suppose that when the price per ream of recycled printer paper rises from $4 to $4.50, the quantity demanded falls from 800 to 600 reams per day. Using the midpoint formula, what is the price elasticity of demand (in absolute value) over this range?

A) 0.003

B) 0.41

C) 2.43

D) 4