Elasticity and Its Application by James DeNicco

About the Lecture

The lecture Elasticity and Its Application by James DeNicco is from the course Principles of Microeconomics (EN). It contains the following chapters:

A Closer Look at Elasticity
Determinants of Demand Elasticity
Computing Price Elasticity of Demand
Variety of Demand Curves
The Impact of Elasticity on Revenue
The Income and Cross-Price Elasticity of Demand
The Price Elasticity of Supply
Recap

Included Quiz Questions

Which of the following statements is true?

Luxuries tend to be more elastic than necessities.
Broader markets tend to be less elastic.
Goods with close substitutes tend to be less elastic.
Goods tend to be less elastic over longer time horizons.

If the quantity demanded of a good falls by 20% when the prices rises by 10%, then the price elasticity of demand is _______________ and the demand curve is considered _______________.

2; elastic
2; inelastic
½; inelastic
½; elastic

Which of the following conclusions is correct?

When demand is elastic, price and total revenue move in the opposite directions.
When demand is inelastic, price and total revenue move in the opposite directions.
When demand is elastic, price and total revenue move in the same direction.
When demand is unit elastic, price and total revenue move in the opposite directions.

Suppose that an increase in the price of milk from $2.85 to $3.15 a gallon decrease the quantity purchased of Oreo cookies from 10,000 to 9,500. Using the midpoint method, the cross price elasticity is _______________ and these goods are _______________.