11/19 econ

(49-5) use the graph to calculate producer surplus when the market is at equilibrium

$1,300

(49-1) If the box office price of the ticket to see phantom of the opera is $50 and there is no other market for tickets than the total consumer surplus for the five students is

$240

The price of gasoline rises 5% and the quantity of gasoline purchased falls 1% the price elasticity of demand is equal to ____ and demand is described as ____

0.2, inelastic

If the price of a good is increased by 20% and the quantity demanded decreases by 15%, then the price elasticity of demand us equal to

0.75

local local restaurant has estimated that the price elasticity of demand for meals is equal to two if the restaurant increases many prices by 5% they can expect the number of customers to decrease by ___ and total revenue to ___

10%, decrease

egg producers know the price elasticity of demand for eggs is 0.1 if they want to increase sales by 5% they will have to lower the price by __%

50

there are several close substitutes for Bayer aspirin but if you were substitutes for a complete medical examination therefore you would expect the demand for

Bayer aspirin to be more price elastic

suppose the cross price elasticity between demand for Burger King burgers and the price of McDonald's burgers is 0.8 if McDonald's increases the price of its burgers by 10% then

Burger King will sell 8% more burgers

according to the substitution effect a decrease in the price of a product leads to an increase in the quantity demanded of a product because buyers

purchase more of the now relatively less expensive good

Nico DVD rentals increased by 10% when his income increases by 20% based on this information we know that

DVDs are a normal good

(47-1) The absolute value of the price elasticity of demand for the segment AB is

Is greater than the price elasticity of demand for segment BC

State governments place excise tax on cigarettes because

It is an easy way to raise tax revenue while discouraging smoking

which of the following best describes the income effect of price increase

Michelle's apartment rent increases so she canceled her subscription to a monthly magazine

when Joe's income is $100 per week, he spends $20 Per week on pizza when his income rises to $110 he spends $25 Per week on pizza if the price of pizza remains constant this information implies that for joe

Pizza is a normal good and a luxury

A men's Thai store sold an average of 30 ties per day when the price was six dollars per tie the same store sold 60 of the same ties per day when the price was three dollars per tie in this case the absolute value of the price elasticity of demand is

greater than 1 but less than 3

(47-1) The price elasticity of demand for the segment AB is

greater than one

if an increase in the price of a good leads to an increase in total revenue then

The demand curve must be price inelastic

Sonic a local wireless phone company tested the effects of a price reduction for text messaging it lowered prices from $0.08 to $0.04 and found that the number of messages sent tripled this means

The demand for text messaging is elastic in this price range

The demand for textbooks is price in elastic which of the following would explain this

The good is a necessity for college students

which of the following is likely to make supply more inelastic

The inputs necessary for production cannot readily be increased

The price elasticity of a good will tend to be greater

The longer the relevant time period

(50-2) based on the figure consumers are likely to bear more of the burden of an excise tax in the situations illustrated by panels

a and d

(50-9) The government recently lovely $10 tax on the producers of bluejeans using the graph identify the areas that represent the sum of consumer and producer surplus after the tax was levied

a+f

recently the government considered adding an excise tax on CDs that can be used to record music if this tax is an acted how would it affect the price consumers pay the price producers receive and the quantity if CDs exchanged

a: higher lower lower

consider the market for milkshakes an increase in the consumer surplus may result from

an increase in the supply of milkshakes

(50-9) The government recently love you and a $10 tax on the producers of bluejeans using the graph identify the areas that represent tax revenue

b+d

sometimes airlines raise ticket prices as the flight departure date approaches in the hope of increasing revenue the airlines raise their prices on the assumption that

consumer demand becomes less price elastic as departure time approaches

suppose the price of cereal rose by 25% and the quantity of milk salt decreased by 50% then we know that the

cross price elasticity between cereal and milk is -2

(47-4) if price was initially set at eight dollars and then increased to $10 one would find that total revenue

decreases as the price affect is dominated by the quantity affect

using the midpoint method of elasticity to calculate the price elasticity of demand eliminates the problem of computing

different elasticity is depending on whether price decreases or increases

(47-4) at price is greater than $8, demand is ___ while prices below $8 are ___ and demand at $8 will be ____

elastic, inelastic, unit elastic

The cross price elasticity of electricity with respect the price of natural gas has been estimated as being equal to 0.2 this implies that

electricity and natural gas are substitutes.

A rancher in Oklahoma decides to raise the price of her beef by 19% over what the prevailing market price equals if the demand for beef is perfectly elastic this ranchers quantity demand will

fall to 0

after you graduate from college you open a business someone computers there are many businesses in your city that sell similar computers based on this information the price elasticity of demand for the computers that your business will sell will be

highly elastic

A major state university in the south recently raise tuition by 12% an economics professor at the University asked if students due to the increase in tuition how many of you will transfer to another university one student out of about 300 so that he or she would transfer based on this information the price in the last day of demand for education at this university is

highly inelastic

if a good is very expensive but it is a necessity with very few substitutes you would predict the price elasticity of demand for the good to be

inelastic

it is very difficult for Julia to find expensive and available inputs for her business because of this we would predict that Julia's press elasticity for supply would be

inelastic

to say that to goods are complements the cross price elasticity of demand should be

less than 0

(47-1) The price elasticity of demand for the segment EF using the midpoint method is

less than one but greater than zero

if your purchases of shoes increase from nine pairs per year to 11 pairs per year when your income increases from $19,000 to $21,000 other things equal that in for you shoes are considered a

normal good

The price elasticity of demand for ski lessons in New Hampshire is greater than 1.00 this means that the demand for ski lessons is ___ in New Hampshire

price elastic

if total revenue goes down when the price falls the price elasticity of demand is said to be

price inelastic

what a public transit systems such as the subway or bus line raises its fares it may experience an increase in total revenue this suggests that the demand is

price inelastic

The university president believes that increasing student tuition by 5% will increase revenues if the president is correct that revenues will increase then the tuition will

reduce the number of students and rolling by less than 5%

When price goes down, the quantity demanded goes up. Price elasticity measures how

responsive the quantity change is in relation to the price change

if the absolute value of price elasticity of demand is greater than one this means

small percentage changes in price will lead to much larger changes in the percentage change in quantity demanded

What a consumer consumer is more of a good that has become cheaper in place of a good that has become relatively more expensive this is known as the

substitution effect

(49-5) given the information in the table if the price for Phantom tickets is $55 which student has the highest individual producer surplus

tim

suppose the price elasticity of demand for yachts equals 4.04 while the price elasticity of supply for yachts equals 0.22 if Congress reinstates a luxury tax on yachts how old the burden of the tax be divided

yacht builders will pay a larger share than yacht buyers

you manage a popular mulch shop and lately revenues have been disappointing your friend suggests that raising soda prices will increase revenues but your waitress suggests that decreasing so the prices will increase revenues you aren't sure who is right but you do know that

your friend thinks the demand for sodas is in elastic while your waitress thinks the demand for sodas is elastic