. Suppose the price elasticity of demand for oranges is -1.8. If a fall frost de

Question

. Suppose the price elasticity of demand for oranges is -1.8. If a fall frost destroys one-third of the nation's orange crop, how will that affect total expenditures on oranges, all other things unchanged?
A) total expenditures will rise
B) total expenditures will fall
C) total expenditures will remain unchanged
D) not enough information is given to answer the question

33. The price elasticity of demand for cabbage has been estimated to be -0.25. If an insect infestation destroys 20 percent of the nation's cabbage crop, how will that affect total expenditures on cabbage, all other things unchanged?
A) total expenditures will rise
B) total expenditures will fall
C) total expenditures will remain unchanged
D) not enough information is given to answer the question


34. The price elasticity of demand for ground beef has been estimated to be -1.0. If mad cow disease strikes the United States and a large percentage of the cattle are removed from the market, how will that affect total expenditures on hamburger, all other things unchanged?
A) total expenditures will remain unchanged
B) total expenditures will fall by more than 1 percent
C) demand will fall by 1 percent, but total expenditures will fall by less than 1 percent
D) total expenditures will rise

35. The price elasticity of demand for fresh tomatoes has been estimated to be -2.22. If a new insecticide and fertilizer treatment yields a 20 percent increase in the nation's fresh tomato crop, how will that affect total expenditures on fresh tomatoes, all other things unchanged?
A) total expenditures will remain unchanged
B) total expenditures will fall
C) total expenditures will rise
D) not enough information is given to answer the question

36. The price elasticity of demand for milk has been estimated to be somewhere between -0.49 and -0.63. If a new system of feeding and milking cows yields a 15 percent increase in the production of milk throughout the country, how will that affect total expenditures on milk, all other things unchanged?
A) total expenditures will remain unchanged
B) total expenditures will fall
C) total expenditures will rise
D) not enough information is given to answer the question

Explanation / Answer

. Suppose the price elasticity of demand for oranges is -1.8. If a fall frost destroys one-third of the nation's orange crop, how will that affect total expenditures on oranges, all other things unchanged?

The p.e. is negative, aka inelastic

Even though we have fewer crops, we have the same price - price will not go up, but with fewer crops, our # sold does go down:
A) total expenditures will rise
B) total expenditures will fall
C) total expenditures will remain unchanged
D) not enough information is given to answer the question

33. The price elasticity of demand for cabbage has been estimated to be -0.25. If an insect infestation destroys 20 percent of the nation's cabbage crop, how will that affect total expenditures on cabbage, all other things unchanged?
A) total expenditures will rise
B) total expenditures will fall (same idea as #1)
C) total expenditures will remain unchanged
D) not enough information is given to answer the question


34. The price elasticity of demand for ground beef has been estimated to be -1.0. If mad cow disease strikes the United States and a large percentage of the cattle are removed from the market, how will that affect total expenditures on hamburger, all other things unchanged?
A) total expenditures will remain unchanged
B) total expenditures will fall by more than 1 percent
C) demand will fall by 1 percent, but total expenditures will fall by less than 1 percent we don't know if demand will fall
D) total expenditures will rise

35. The price elasticity of demand for fresh tomatoes has been estimated to be -2.22. If a new insecticide and fertilizer treatment yields a 20 percent increase in the nation's fresh tomato crop, how will that affect total expenditures on fresh tomatoes, all other things unchanged?
A) total expenditures will remain unchanged
B) total expenditures will fall
C) total expenditures will rise (price remains unchanged but more are bought - great!)
D) not enough information is given to answer the question

36. The price elasticity of demand for milk has been estimated to be somewhere between -0.49 and -0.63. If a new system of feeding and milking cows yields a 15 percent increase in the production of milk throughout the country, how will that affect total expenditures on milk, all other things unchanged?
A) total expenditures will remain unchanged
B) total expenditures will fall
C) total expenditures will rise (same idea as #35)
D) not enough information is given to answer the question

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