MTN H+ Telecel Econ 151Lecture 4B.pptx 017 12:48 Q If good X is a normal good and its price falls, the price-consumption curve must be: A. upward sloping (and positive). 20% 20% 20% 20% 20% B. downward sloping. Cupward sloping (and positive) or downward sloping. D. upward sloping and either positive or negative (backward bending), but not downward sloping. E. upward sloping and negative (backward bending). B. C. DE Δ 38/38 Go to page О ☐
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- The demand for a commodity generally decreases as the price is raised. Suppose that the demand for oil (per capita per year) is D(p)=1000//p barreis, where p is the price per barrel in dollars. Find the demand when p=55. Estimate the decrease in demand if p rises to 56 and the increase in demand if p is decreased to 54. The demand D(55)= The decrease in demand =? barrels. The increase in demand =? barrels.QUESTION 7 28 C 24 20 16 12 8 4 0 4 8 O a) 1 Ob)-3 Oc)-11 Od) 17/3 O e) 2/11 Of)-2/21 Og) - 3/15.5 Oh)-3/1.5 12 16 20 E 07. Using the midpoint basis, and expressing the answer in fraction or integer format, calculate the elasticity statistic for the responsiveness of E to C changing from 2 to 6q3- What is the correct interpretation of elasticty value of 0.5 for Y with respect to X? Select one: a. If X increases by 1 unit, Y increases by 0.5 unit. b. If X increases by 1%, Y increases by 0.5%. c. If Y increases by 1 %, X increases by 0.5 %. d. If Y increases by 1 unit, X increases by 0.5 unit.
- IF demand equation is Qdx=20+3M assume that the income of individuals are 500RO .What will be the Qd a )1520 b) 1250 c) 1500 d) 520MCQ 9 If the cross-price elasticity of demand between products X and Y is positive, we can infer that: A products X and Y are complementary goods the demand for both products must be price inelastic, to ensure that a fall in the price of one of the products does not lead to a decrease in the demand for the В other product C I do not want to answer this question. D the price elasticity of demand for both products must be positive E the income elasticity of demand for both products must be negative, because the multiplication of two negative numbers gives a positive number F products X and Y are substitute goodsIn the market for cars, the price elasticity of supply is +1.5, and the price elasticity ofdemand is -0.8. The equilibrium price is $ 30 thousand, and quantity is 120 million.(a) Assuming supply and demand are linear, reconstruct and draw the supply and demandcurves. Label the intercepts.(b) To reduce traffic, the government imposes a $400 tax on cars. What are PB and PS after thetax? What is the new equilibrium quantity? Illustrate them on the same graph.(c) How big is the change in consumer surplus, producer surplus, government revenue, anddeadweight loss?
- Over a relatively short time horizon demand for petrol is likely to be inelastic with respect to price. But over the longer term, as motor vehicle owners have the scope to change to other types of fuel such as gas, demand for petrol will be more elastic with respect to price. Group of answer choices! aTrue b.FalseA large company in the communication and publishing industry hs quantified the relationship between the price of one of its products and the demand for this product as Price = 160 -0.01 xDemand for an annual printing of this particular product. The foxed costs per year (ie. per printing) = $4T 000 and the variable cost per unit = $35. What is the maximum profit that can be achieved? What is the unit price at this point of optimal demand? Demand is not expected to be more than 7,000 units per year. The maximum profit that can be achieved is S. (Round to the nearest dolar.) The unit price at the point of optimal demand is S per unit (Round to the nearest cent)P & A Ch 05 Q10 Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.2. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 10%, it should increase the price by ? %. If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be ( larger / smaller ) than the effect 3 months from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. Adults are more likely to be addicted to cigarettes. Teenagers do not have as much income as adults, so they are more price sensitive. It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes.
- 3.1 Distinguish amongst the main categories of elasticity. Include in your answer the provision of their formular.Suppose Government of Pakistan wants to put a curb on public smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes currently costs Rs.175 and the government wants to reduce smoking by 30 percent, by how much should it increase the price? Kindly type only percentage change in the box given below. Do not use percentage sign in the box. Also, do not use any plus or minus sign in the box.The manager of a Cape Town superette carries a stock of Jive soft drinks. The countryexperiences an economic recession which yields an anticipated consumer income decrease of6 %. As a result, the income elasticity of demand for this product is estimated to be –2.5.(a) Calculate the percentage change in the quantity of your soft drink orders required toaccommodate the new demand without a surplus or shortage of inventory. [3](b) What does the elasticity coefficient of –2.5 reveal? [3]