cross price elasticity of goods A & B is 5 and the income elasticity of good A is 2,

An increase in the price of A = increase in demand for B

led to a decrease in price for soybeans-less Chinese demand, in the short run increased the US trade deficit (trade now)

What does elasticity of supply show?

Long run elasticity is greater than short run, how much price affects QS

The total revenue test shows...

whether a curve is in the elastic or inelastic range

If a point on a linear line is closer to the quantity axis (x-axis), then it is

in the inelastic range of the graph

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Elasticity

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AP Microeconomics - Elasticity

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Questions 10

Answers

1
Assume the price decreases from $10 to $7, while QD increases from 25 to 40. Demand is
unit elastic (1)
elastic (greater than 1)
No more math!
inelastic (less than 1)
2
Which of the following have the most elastic demand?
Real Estate
Restaurant Meals
No need to say elasticity of demand or elasticity of QD- :)
Gold
3
Which of the following is least relevant to the short run elasticity of demand?
Necessities versus luxuries
Substitutability (yes, it's a word!) -availability of subs?
Proportion of income
Time
4
cross price elasticity of goods A & B is 5 and the income elasticity of good A is 2,
Good B is a normal good
cross price is + so comps or subs?Income elasticity is +, so
Goods A & B are complements
An increase in the price of A = increase in demand for B
5
Trump's tariffs...
led to a decrease in price for soybeans-less Chinese demand
in the short run increased the US trade deficit (trade now)
Are a good method to force China to open their market
will push China into TPP -labor & environmental protections?
6
What does elasticity of supply show?
the change in QD/divided by the change in P
Long run elasticity is greater than short run
how much price affects QS
Can we do the midpoint formula - we just need to divide by 2
7
Which of the following must be true for original Michelangelo sculptures?
Demand is relatively inelastic
No, I did not put a photo of it on the screen
Supply is extremely inelastic
Supply is perfectly inelastic
8
The total revenue test shows...
an elastic demand produces a decrease in TR if P decreases
You doing the YMCA dance - econ style
that an increase in P will lead to an increase in TR
whether a curve is in the elastic or inelastic range
9
OJ increased in price 30%, while QD for apple juice increased 15%. Cross price coefficient?
.5
2
You can't use a calculator on AP test, can you divide by P?
.15
10
If a point on a linear line is closer to the quantity axis (x-axis), then it is
in the inelastic range of the graph
in the elastic range of the graph
at the hard to find unit elastic portion of the graph
going to crash like Lady Gaga on a windy Houston night!

Elasticity Flashcards | StudBud