Question

There are several close a ttes for Bayer aspirin but were medical examination they all other things equal you w A) for the two to he lly price-clastic B) Bayer aspirin to more perfectly prices Be Bayer aspirin to be m i stic than is the demand for med medical examination to her price-clastic than is the demand is the demand for Don's income incred 2 0.000 10 $50,000 per year. Eric's con pro football games inced from two to four por you. By the midpoint come elasticity of demand e hall me tickets is equal to game tickets are Boods and demand for football game is goods A) 1033: Issione income elastic B) +067: normal income elastic C) -3: inferior income inelastic D) +3: normal; income elastic If the estimated price h ity ofund for foreien travel is 4: A) a 10% decrease in the price of foreign travel will increase quantity demanded by 40% B) the demand for foreign travel is inclestie c) a 10% increase in the price of foreign travel will increase quantity demanded by D) a 20% increase in the price of faign travel will increase quantity demanded by 40 9. Egg producers know that the elasticity of demand for eggs is 0.1. If they want to increase sales by 5%, they will have to lower price by A) ain B) 1 C) 5 D) 30% 10. A shirt manufacturer sold 10 doren shirts per day at 54 per shirt but sold 15 dozen shirts er day at $3 per shirt. The price clasticity of demand (by the midpoint method) is: A greater than but less than 1 B) equal to 1 C) greater than I but less that D) greater than 3.

Answer 1

Ans.6- (C)

A good with more close substitutes has more price elastic demand and a good with fewer substitutes has less elastic demand.

Ans.7-

@ Income elasticity = Q-Q, & Iata 4-2 Sowo-Yoovo 9o00o good - 3 Lince income elasticity is positiuo so is normal. & correct ansever is col. 8 s CA Price elasticity is normally represented in absolute ferms & here elasticity of 4 actually moms -4. @ Price Elasticity = % change in quantity demanded - lo change in Price 0.1 = 5 where = % change in Brice x = 50% a consect answer is CD)