Question

564Economice and Puic Pollogs An Analytical Approach 22, True, False Dncertain cinde one explain your answer)y "The demand for tires will be more the demand for Goodyear beand tires tal and ba business for one f the costs Uncertain (cirede oner explain your anwer): "The demand for student more responsive to price over a one-month period than it will be over a one 4 True. False, Uncertain (cirle ones explain your answer): "Because there is no substitute for an appen. dectomy, physicians will be able to charge very high prices 2. Comp True, False, Uncertain (circle one; explain your answer): "An innovation that lowers the p always increase the total revenues of suppliers. Uncertain (circle one; explain your answer): "TIf the elasticity of demand for gasoline i -20 then, ceteris paribus, a 10% tax on gasoline would reduce gasoline consumption by 5%" 27. True, False, Uncertain (circle one; explain your answer): "If the income elasticity of demand for the size of a house measured in square feet is 1.0 then, ceteris paribus, if income doubled over 20 years the size of new homes would double over 20 years as well." 28. Find an application or example (good or bad) of one of the ideas covered in Chapters 7 or 8 from the Wall Street Journal, the Economist, or the New York Times. Write an at-least-one-page essay discussing the economics of the article you selected. Attach the article or a copy and your essay to this assignment Workbook pages may not be reproduced in any form without the written permission of the publisber. Wor

questions 22-27

Answer 1

22. True (because tires are a broader category of goods and thus will have more elastic demand)

23. False (as demand is inelastic in short time period and more elastic more long time period)

24. True (as lack of substitutes makes the demand inelastic and thus physians can benefit by charging high prices)

25. Uncertain (as fall in prices might not match up to increase in sales. It all depends on elasticity)

26. Uncertain (as tax of 10% will not necessarily translate into increase in price by the same 10%)

27. False (Not the size but the demand will double)