Question

31. An ice cream shop sells 580 ice creams in a day when it charges a price of $2.80 for an ice cream. When it raises the price to $3.20, it sells 500 ice creams in a day. What is the price elasticity of demand (in absolute value)?

1.24

1.67

1.35

1.11

0.90

32. When a firm increased the selling price by 20% it noticed a 30% decrease in quantity demanded. The price elasticity of demand in this case (in absolute value) is _______.

1.80

1.50

0.67

1.25

0.86

33. The price elasticity of demand for pizza purchased in a pizza restaurant is estimated to be 1.9 (in absolute value). This means that the consumers are relatively _______ to price changes and the percentage change in quantity demanded (in absolute value) is _______ than the percentage change in the price (in absolute value).

insensitive, smaller

sensitive, larger

sensitive, smaller

insensitive, larger

34. In all of the following cases—except one—the firm firm’s total revenue will increase. In which case will the firm’s total revenue decrease?

Demand is perfectly inelastic, and the firm raises the price.

Demand is elastic, and the firm lowers the price.

Demand is perfectly elastic, and the firm lowers the price.

Demand is inelastic, and the firm raises the price.

Demand is inelastic, and the firm lowers the price.                                                                   

35. Which of the following is likely to have a price elasticity of demand greater than one in absolute value?

something the consumer needs immediately that is inexpensive

a necessity with few substitutes

something the consumer needs immediately that has no close substitutes

an inexpensive item that is a necessity

a durable good that is expensive

Answer 1

#Please rate positively...thank you

31) Answer 0.90 Ed = 0, -0. Po A = New Quantity - 500 Co = old Quantity - 580 P = Price New - 3.20 Po - Old price = 2.80 = _ 500-580 x 2.80 3:20-2.80 580 2.80 .90 580 224 = 2 76 = 0.96 232 32) Answer. 1.50 Ed = demanded % change in % Change in Quantity price - 30 - 1.50 33 Answer. Sensitive, Larger - Because elasticity is greater than one price. will price 34) Answer Demand is inelastic and firm lowers - when demand in inelastic, decrease in price decrease the total revenue and increase in will increase the total revenue. (35) Answer Durable good that is expensive - Necessary goods have less elastic demand and good have elastic demand. Luxury