Question

Question 14 1 pts If the price elasticity of supply was calculated as 0.40 for a product and the price increases by 12%, what would happen to the quantity supplied? O Quantity supplied would increase by 8%. O Quantity supplied would increase by 6.3%. O Quantity supplied would increase by 4.8%. Question 15 1 pts As we move along a typical negatively sloping, linear demand curve O the elasticity is constant. it results in elasticity and slope being the same. O the slope is constant.

Answer 1

question (4) %D Sapplied elasticity of o inquantity in Price Supply 0.4 % 0 in quantity Supplied 12% -S % ain 408 % quantity suppied And quantity suppied would increased by 4.8% question (15) Linear demand Carve. a = arb -bp Siole - – b de Where b is a Parameter remain unchanged for typical demand curve 0 elasticity a d de 11 -b. . p

elasticing = -bof a result for example if The demand curve we move docon along Price decreases and quantity increases as numerator of elasticity that is decvecses and denomonator of ciasticity. That is a increases. The combined effect for given Pausameter (b) is elasticity decvecujes home :-) Große remain unchanged elemcity changu Ans: The scope is Constant. question (18) From Lawo f diminoning marginal Urining Consumption of a good increases for every Sucessive unit consumed the utili tility from

each unit Connet decreases, and thuefore Their Sum that is Total utility decreases each unit that is marginal Unility decreases , But The sum of marginal utilities Total utility increase that is Ans: total utility vises, but marginal utility falls checking MR s me, question (27) one by one. Profit is maximized when in this situation frofit is not maximized Because for every unit Conocarmen Producer gets more Than The cost of production of Producer has incentive To Producer and sell more to get more forogit Hence statement is Not TRUE Seu That units. So By

O No. Because Profit is maximized when mR <mc Because Producer has incentive To decrease the production. Statement is Not TRUE Profit is not maxtmized NOT maximized when mRy mc. This statement is TRUE Because there is Still scope of increasing there by Profits. out fut and Ans: Profit is not maximized When MRSMC.

question (28) individual from in a lerfectly competitive market is a Price taker and The Price is determined by market. Demand Supply Horizontal Line AR-MR-DD 1 quantity o determined market cach quantity For given Price by individual from decidus how much to produce as a result from house forizontal (Poryallel) to quantity Axis demand curve which is caued erfectly elastic Demand for given price elastic. (also Horizontal Line) penses Perfectly Ans: horizontal dine