Question

1. Let Edt= -2. This implies that the demand for movie tickets is

Inelastic, because a 1% change in Ptchanges Qdtby 2 units

Inelastic, because a 1% change in Ptchanges Qdtby 1%

Elastic, because a 1% change in Ptchanges Qdtby 1%

Elastic, because a 1% change in Ptchanges Qdtby 2%

2.    Regulatory agencies engage in all of the following activities _______.

		controlling entry into the regulated industries
		overseeing the quality of service provided by the firms
		setting prices that consumers will pay
		None of the Above
		All the Above 3.    Season tickets for sporting events is an example of: Bundling Two-part tariff Price Discrimination Block Pricing 4. The following is a Cobb-Douglas production function: . What is correct here? A one-percent change in L will cause Q to change by one percent A one-percent change in K will cause Q to change by two percent This production function displays increasing returns to scale This production function displays constant returns to scale This production function displays decreasing returns to scale

Answer 1

1. Elastic because a 1% changes in p changes Qdt by 2%

2. All of the above

Regulatory agencies control entry, pricing and quality of the product.

3. Bundling

Season ticket is an example of bundling.

4. This production function displays constant returns to scale