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7.
True or False. Explain your answer:
A decrease in airfare prices will increase the demand for airline flights all other things being equal.
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- What might you infer about the price elasticity of demand for diesel fuel in the short run? In the long run?Do you agreee that when the price of petrol rises, the demand for cars decreases.21. There was a new store that opened besides your store if the cross elasticity for both of you is positive. Is it advisable to reduce your price? Why or why not? Explain.
- What would the gasoline price elasticity of supply mean to UPS or FedEx?The table below shows the percentage change in quantity demanded of sending regular mail, of sending parcels, and of home broadband service in Australia from a one-percent increase in each specified price (holding all other prices constant): Change in price of: Sending regular mail Effect on quantity of: Sending regular Sending parcels Home broadband mail -1.5 Sending parcels 0 Home broadband +0.05 0 -1 -0.7 +0.01 -0.11 -0.5 a) For which services is quantity demanded price elastic? Or price inelastic? b) Which services are substitutes and which are complements? c) How would an increase in the price of sending regular mail affect total revenue to Australia Post from that service? How would an increase in the price of home broadband affect total revenue to suppliers of broadband?what are Factors affecting the demand of gasoline
- 3. Instead of assuming a linear demand curve, suppose we assume that demand is char- acterized by the following demand function q = 13.572P-1.513. If a change of 15% in price of good X, results in a change in demand for good Y of 5%,then:(a) The cross-price elasticity of demand is 1/3 and the goods are substitutes(b) The cross-price elasticity of demand is 3 and the goods are substitutes(c) The cross-price elasticity of demand is 1/3 and the goods are complements(d) The cross-price elasticity of demand is 3 and the goods are complements(e) None of the above is true5. When the price of widgets was reduced from $600 to $450, the quantity of tingdeers went from 9,000 to 11,000 per month. Calculate the cross price elasticity? Are widgets and tingdeers substitutes or complements? 6. Average real incomes in Dominica last year increased by 4 percent, while taxi ridership went up by 3 percent. What is the income elasticity of demand of taxi transportation? Is it a normal or an inferior good?
- (a)Diagrammatically show and explain how oil prices dropped as concerns over fuel demand in the near term in COVID-19 pandemic hit Europe and the United States. (b)Diagrammatically show and explain what happened to the oil market if the price remained unchanged despite the concerns over the fuel demand. (c)You sell two different goods: printers and toner cartridges. The price elasticity of demand for the printers is -3.4, and you earn a revenue of RM15,000 per month from the good. You earn a revenue of RM5,000 per month from the toner cartridges. The cross price elasticity of demand for both of the goods is -2.5. If you decide to decrease the price of the printers by 5%, calculate your new total revenues for…11. Which of the following will cause a change in the demand for automobiles? a) a government subsidy to auto maker b) a change in the price of gasoline c) A change in the price of a resource used to make cars. d) a change in productivity in auto factoriesSuppose that the elasticity of supply of snow blowers is 2.3. If the price of snow blowers rises 5.5 percent, the quantity supplied of snow blowers would change by ______________ percent
