Question

Please help with these questions:

Question 1 0.2 pts When the price of scooters drops by 5 percent, the quantity demanded changes by 20 percent. We know that the price elasticity of demand for scooters is O inelastic. O perfectly inelastic. O perfectly elastic. unitary elastic. O elastic. Question 2 0.2 pts Nicolette raised her quantity demanded of hockey pucks from 100 to 150 when the price fell from $5 to $3 per puck. Using the midpoint method, her price elasticity of demand is 0.80. O -0.80. O 0.40. Question 3 0.2 pts A perfectly elastic supply curve is vertical. O has an infinite slope. is downward sloping. is horizontal. is backward bending.

Answer 1

[As HOMEWORKLIB’s policy and guideline, the first-four MCQs are answered below:]

1.

Answer: 5^th option

Price elasticity of demand = Percentage change in quantity demanded / Percentage change in price

                                                = 20% / (- 5%)

                                                = - 4

                                                = 4 (by ignoring negative sign)

Since it is greater than 1, the elasticity is elastic.

2.

Answer: 3^rd option

Price elasticity of demand = [(Q2 – Q1) / {(Q1 + Q2) / 2}] / [(P2 – P1) / {(P1 + P2) / 2}]

                                           = [(150 – 100) / {(100 + 150) / 2}] / [(3 – 5) / {(5 + 3) / 2}]

                                           = (50 / 125) / (-2 / 4)

                                           = - (0.40 / 0.50)

                                           = - 0.80

3.

Answer: 4^th option

This is the case when the supply becomes zero at any change in price. Therefore, the supply curve would be horizontal to X axis.

4.

Answer: 1^st option

Price elasticity of demand = Percentage change in quantity demanded of P / Percentage change in price of E

                                                = 0 / [{(2.5 – 1.5) / 1.5} × 100]

                                                = 0 / 66.67%

                                                = 0

It happens because these two are unrelated.