27. Assume that the demand for salt is relatively inelastic and that the demand for orange juice is relatively elastic . Imposing a tax on salt will cause a lesser decrease in traded quantity than imposing the same percentage on orange juice. Hence,option(B) is correct.
28. We can expect a tax on gasoline to cause the quantity of gasoline traded to change less than a similar percentage tax on entertainment will cause the quantity of entertainment to decline. Hence,option(B) is correct.
29. The quantity traded of gasoline is change by less than the quantity of entertainment because the gas is more necessary than entertainment which means Gasoline has inelastic demand. Hence, option(B) is correct.
30. If the labor supply is nearly vertical ,then a tax on labor has a small decrease in the quantity of work in the market and a tax on labor has little impact on the amount of work labor is willing to do. Hence,option(D) is correct.
27). Assume that the demand for salt is relatively inelastic and that the demand for orange juice is relatively el...
Price Controls and Taxes: Price A P Supply 2 в Е н G Demand Quantity 0 23) In the figure shown above, if prices go from P1 to P3, what could this be due to? There is a tax imposed on suppliers per unit sold. Demand for the good increases due to an increase in people's incom5. There is a sales tax imposed on consumers. d. a. b. с. a binding price floor is imposed Both c and d are...
Question 1 Suppose the cross-price elasticity of demand between grapefruit juice and orange juice is approximately 6. What does this mean? If the price of grapefruit juice rises by $1.6 more cartons of orange juice will be purchased. A1 percent decrease in the price of grapefruit juice leads to a 6 percent increase in orange juice consumption A6 percent increase in the price of grapefruit juice leads to a 1 percent increase in orange juice consumption The demand for orange...
7. If the price of orange juice rises 10%, and as a result the quantity demanded falls by 8%, the price elasticity of demand for orange juice is O A. inelastic. OB. -1.25 O c. Both A and B above. OD. Neither A nor B above. 18. If the price of orange juice rises 10% and as a result the quantity demanded falls by B%, the price elasticity of demand for orange juice is O A. - 10.0. OB. -0.80....
If a good, such as salt, is inelastic then an increase in price will cause demand to fall by a greater percentage An increase in price will cause demand to fall by less than the percentage change in price An increase in price will cause other firms to market the good. An increase in price will cause demand to increase
Question 7 Suppose the cross-price elasticity of demand between grapefruit juice and orange juice is approximately 6. What does this mean? O If the price of grapefruit juice rises by $1, 6 more cartons of orange juice will be purchased. OA1 percent decrease in the price of grapefruit juice leads to a6 percent increase in orange juice consumption The demand for orange juice is 6 times greater than the demand for grapefruit juice. A6 percent increase in the price of...
The demand for gasoline is inelastic, a 5 percent increase in the price of gasoline will: O decrease the quantity of gasoline demanded by more than 5 percent. O increase the quantity of gasoline demanded by less than 5 percent O increase the quantity of gasoline demanded by more than 5 percent. O decrease the quantity of gasoline demanded by less than 5 percent.
Price Controls and Taxes: Price Supply Pit------- - - - - E DE Demand - Quantity 23) In the figure shown above, if prices go from PI to P3, what could this be due to? a. There is a tax imposed on suppliers per unit sold. b. Demand for the good increases due to an increase in people's incom . c. There is a sales tax imposed on consumers. d a binding price floor is imposed e. Both c and...
APPENDIX REVIEW QUESTIONS will the equilibrium price of orange juice increase or dy/ crease in each of the following situations? LO3.7 upp a. A medical study reporting that orange juice reduces can- plus t cer is released at the same time that a freak storm de- recen ernm stroys half of the orange crop in Florida. b. The prices of all beverages except orange juice fall by they p half while unexpectedly perfect weather in Florida re-hoe w sults in...
5. If the demand for product X is inelastic, a 4 percent decrease in the price of X will A. decrease the quantity of X demanded by more than 4 percent. B. decrease the quantity of X demanded by less than 4 percent. *C. increase the quantity of X demanded by more than 4 percent. D. increase the quantity of X demanded by less than 4 percent.