Refer to the information provided in Figure 5.3 below to answer the question(s) that follow.
Figure 5.3Refer to Figure 5.3. Use the midpoint formula. If the price of a gardenburger increases from $8 to $10, the price elasticity of demand equals ________ and demand is ________.
A. -4.5; elastic
B. -0.5; inelastic
C. -9.0; inelastic
D. 4.5; elastic
Answer: A
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Buffalo in the United States almost became extinct while cattle, an animal that provides similar products, never has been close to extinction. The difference is due to
A) the greater marginal value of a head of cattle relative to buffalo, leading to over-hunting of buffalo. B) the greater marginal value of a buffalo relative to a steer, leading to the overharvesting of buffalo. C) cattle existing in Europe also while buffalo were specific to North America. D) the use of private property rights on cattle and common property rights on buffalo.
Which of the following terms refers to price elasticity of demand calculated over a range of prices?
A. Unit elasticity B. Cross-price elasticity of demand C. Point elasticity of demand D. Arc elasticity of demand
Variability in prices for grains tends to be _____ (less than, greater than) variability in price for beef and hogs.
a. Less than b. Greater than
The economizing problem for society is:
a. That product prices rise more rapidly than incomes of consumers b. To establish prices which are fair for both producers and consumers c. To achieve a more equitable distribution of income in society d. That productive resources are scarce relative to economic wants