Homework Answers
1. Option A
Explanation: When the price elasticity of demand is 1, it means the % change in quantity equals the % change in price. This means there is no change in the total expense when there is an increase or decrease in the price level.
2. Option D
Explanation: When demand is unit elastic, the total evenue does not change because quantity changes at the same proportion as the price.
3. Option A
Explanation: Canned food is considered a normal good and because of this an increase in income results in an increase in demand.
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Q1. Sarah has decided to spend always $200 on clothing per month. Which one of the...
Q1. Sarah has decided to spend always $200 on clothing per month. Which one of the...
Q1. Sarah has decided to spend always $200 on clothing
per month. Which one of the statements below is true?
A. Sarah’s price elasticity of demand is one because she is
maintaining her clothing expenditures as a constant fraction of the
price.
B. Sarah’s income elasticity of demand is equal to zero because her
clothing expenditure does not depend on the price.
C. Sarah’s income elasticity of demand is infinite because she is
willing to spend a huge amount of...
Q1:if the price of pizza rises from $10 to $11 and pizza purchases fall from 20...
Q1:if the price of pizza rises from $10 to $11 and pizza purchases fall from 20 to 15 pizzas, the elasticity of demand is a) -5 b) -3 c) -1/2 d) -1 Q2:over time, the elasticities of both demand and supply become a) unit elastic b) more inelastic c) mnore elastic d) both elasticities become negative Q3:if the income elasticity of demand is 5, this means a) if income rises 5%, quantity demanded rises 1% b) for a 1% rise...
sticity of demand for its ). What happens to Steven's Soup it increases the price of...
sticity of demand for its ). What happens to Steven's Soup it increases the price of its canned soup? b. It falls by 162 percent. es by 1.62 percent. d. It rises. reduce your daily rates by 20 percent. However, y at you own a small boutique hotel. In an attempt to raise revenue you this indicate about the demand for your boutique hotel rooms y rates by 20 percent. However, your revenue falls. What does a. The demand curve...
23. Rank the price elasticity of demand from most ed from most elastic to least elastic...
23. Rank the price elasticity of demand from most ed from most elastic to least elastic for the following three Orowing three items: Alcoholiehavares all beer, and Molson Canadian be A Molson canadian beer all beer alcoholic beverages b. All beer, alcoholic beverages Molson Canadian beer C. Alcoholic beverages all beer Molson Canadian beer d. All beer. Molson Canadian beer alcoholic beverages 24. Which of the following could explain why the deman inelastic? wing could explain why the demand for...
Exhibit 5-1 Demand curve Price per unit (dollars) Demand 20 25 30 Quantity 11. In Exhibit...
Exhibit 5-1 Demand curve Price per unit (dollars) Demand 20 25 30 Quantity 11. In Exhibit 5-1, the demand curve between points a and b is: a price elastic. b. price inelastic. c. unit elastic. d. perfectly elastic. e. perfectly inelastic. 12. Leo's Bakery reduces the price of wheat bread from $3 to $1 and finds that quantity demanded increases from 100 to 122 loaves. Leo calculates that his price elasticity of demand for wheat bread is: a. 0. b....
its fundamentals to economics ensures that resources are allocated to their highest-valued uses. a. Monopoly b....
its
fundamentals to economics
ensures that resources are allocated to their highest-valued uses. a. Monopoly b. Government C. The consumer d. Competition e. Arbitrage Styles 3 As the wago rato increases, the quantity supplied of labor in a market will a. increase. b. decrease c. first increase and then decrease. d. first decrease and then increase. e. remain constant. 4 As the wage rate increases, the quantity demanded of labor in a market will a. increase. b. decrease. c. first...
Refer to Figure 5-1. A perfectly elastic demand curve is shown in Panel D. Panel A. Panel C...
Refer to Figure 5-1. A perfectly elastic demand curve is shown
in
Panel D.
Panel A.
Panel C.
Panel B.
Refer to Figure 5-5. The data in the diagram indicates that
DVDs
are luxury goods.
are both luxury goods and price inelastic goods.
are price inelastic goods.
are both necessities and price inelastic goods.
are necessities.
3-
Consider the following pairs of items:
a. shampoo and conditioner
b. iPhones and earbuds
c. a laptop computer and a desktop computer
d....
Q1) Total government spending in the U.S. economy was around _____ of the GDP in the...
Q1) Total government spending in the U.S. economy was around _____ of the GDP in the financial year 2010. Group of answer choices 36 percent 44 percent 5 percent 16 percent 25 percent Q2) The lowest of the federal or state minimum wage levels prevails in each state. Group of answer choices True False Q3) The market process ensures that, when all transactions are voluntary, resources get allocated to the use where they are valued the most. Group of answer...
Marcus says that he would smoke one pack of cigarettes each day regardless of the price. If he is telling the truth, Marcus’s
QUESTION 25Marcus says that he would smoke one pack of cigarettes each day regardless of the price. If he is telling the truth, Marcus’sa.demand for cigarettes is perfectly inelastic.b.price elasticity of demand for cigarettes is infinite.c.income elasticity of demand for cigarettes is 0.d.More than one of the above is correct.QUESTION 26The demand for a good becomes more inelastica.as more close substitutes for it become available.b.the longer the time horizon.c.as the market is defined more broadly.d.as it is increasingly viewed as...
The text here is the same as in the picture: 9. Application: Elasticity and hotel rooms...
The text here is the same as in the picture:
9. Application: Elasticity and hotel rooms
The following graph input tool shows the daily demand for hotel
rooms at the Big Winner Hotel and Casino in Las Vegas, Nevada. To
help the hotel management better understand the market, an
economist identified three primary factors that affect the demand
for rooms each night. These demand factors, along with the values
corresponding to the initial demand curve, are shown in the
following...
Q1. Sarah has decided to spend always $200 on clothing
per month. Which one of the statements below is true?
A. Sarah’s price elasticity of demand is one because she is
maintaining her clothing expenditures as a constant fraction of the
price.
B. Sarah’s income elasticity of demand is equal to zero because her
clothing expenditure does not depend on the price.
C. Sarah’s income elasticity of demand is infinite because she is
willing to spend a huge amount of...
sticity of demand for its ). What happens to Steven's Soup it increases the price of its canned soup? b. It falls by 162 percent. es by 1.62 percent. d. It rises. reduce your daily rates by 20 percent. However, y at you own a small boutique hotel. In an attempt to raise revenue you this indicate about the demand for your boutique hotel rooms y rates by 20 percent. However, your revenue falls. What does a. The demand curve...
23. Rank the price elasticity of demand from most ed from most elastic to least elastic for the following three Orowing three items: Alcoholiehavares all beer, and Molson Canadian be A Molson canadian beer all beer alcoholic beverages b. All beer, alcoholic beverages Molson Canadian beer C. Alcoholic beverages all beer Molson Canadian beer d. All beer. Molson Canadian beer alcoholic beverages 24. Which of the following could explain why the deman inelastic? wing could explain why the demand for...
Exhibit 5-1 Demand curve Price per unit (dollars) Demand 20 25 30 Quantity 11. In Exhibit 5-1, the demand curve between points a and b is: a price elastic. b. price inelastic. c. unit elastic. d. perfectly elastic. e. perfectly inelastic. 12. Leo's Bakery reduces the price of wheat bread from $3 to $1 and finds that quantity demanded increases from 100 to 122 loaves. Leo calculates that his price elasticity of demand for wheat bread is: a. 0. b....
its
fundamentals to economics
ensures that resources are allocated to their highest-valued uses. a. Monopoly b. Government C. The consumer d. Competition e. Arbitrage Styles 3 As the wago rato increases, the quantity supplied of labor in a market will a. increase. b. decrease c. first increase and then decrease. d. first decrease and then increase. e. remain constant. 4 As the wage rate increases, the quantity demanded of labor in a market will a. increase. b. decrease. c. first...
Refer to Figure 5-1. A perfectly elastic demand curve is shown
in
Panel D.
Panel A.
Panel C.
Panel B.
Refer to Figure 5-5. The data in the diagram indicates that
DVDs
are luxury goods.
are both luxury goods and price inelastic goods.
are price inelastic goods.
are both necessities and price inelastic goods.
are necessities.
3-
Consider the following pairs of items:
a. shampoo and conditioner
b. iPhones and earbuds
c. a laptop computer and a desktop computer
d....
The text here is the same as in the picture:
9. Application: Elasticity and hotel rooms
The following graph input tool shows the daily demand for hotel
rooms at the Big Winner Hotel and Casino in Las Vegas, Nevada. To
help the hotel management better understand the market, an
economist identified three primary factors that affect the demand
for rooms each night. These demand factors, along with the values
corresponding to the initial demand curve, are shown in the
following...
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