Download The price of a good rises and so does the quantity sold. These

Elasticity
The price of bananas rises and so does
the quantity sold. These observations
are consistent with:
A) An upward shift of the
supply curve.
B) A downward shift of
the supply curve.
C) An upward shift of the
demand curve.
D) A downward shift of
the demand curve.
Price
With upward sloping supply, if
Demand Curve shifts up,
Price and Quantity both rise.
Demand curve shifts up
New Equilibrium
Old
Equilibrium
Quantity
If the supply curve for bananas
shifts upwards and demand curve
does not change, we expect that
A)
B)
C)
D)
Price and quantity both rise.
Price rises, quantity falls.
Price and quantity both fall.
Price falls, quantity rises.
Here is the picture.
Price
Supply curve shifts up.
New equilibrium
Old equilibrium
Quantity
How did your clicker do today?
A) It accepted both of my
answers.
B) It accepted one but not
both.
C) It didn’t accept any
except this one.
D) I just arrived and so
didn’t get a chance to
answer other questions.
And on to our lecture
If the demand for bananas is elastic
and half the banana crop is destroyed
by a hurricane
A) The price of bananas
rises and total revenue
falls.
B) The price of bananas
rises and total revenue
rises.
C) Price and quantity
both fall.
If the demand for bananas is inelastic
and the size of the banana crop
increases
A) Total revenue of
banana producers will
rise.
B) Total revenue of
banana producers will
fall.