Microeconomics ECON 120 Exam Three

With respect to price, demand for the toy just discussed is

(relatively) elastic

With respect to price, demand for the device just discussed is:

(relatively) inelastic

When the price of Good 1 changed from $80 per unit to $40 per unit, demand for Good 2 changed from 6000 units to 10,000 units. Calculate the appropriate elasticity. You will interpret your findings in the next question.Enter only numbers, a decimal point, and/or a negative sign as needed. Round your answer to two decimal places as necessary; if you round on intermediate steps, use four places.

-0.75

An electronic device sells 4500 units when its price is $800 and 4000 units when its price is $1300. Calculate its price elasticity of demand, using the methodology in the PowerPoints. You will interpret your finding in the next question.Enter only numbers, a decimal point, and/or a negative sign as needed. Round your answer to two decimal places as necessary; if you round on intermediate steps, use four places.

0.25

The Umezu Corporation produces books. When a book has a price of $22.50 per unit, it produces 20,000 units; when the price falls to $20 per unit, it produces 18,000 units. Calculate price elasticity of supply for the books, using the technique in the PowerPoints. You will interpret your answer in the next question.

0.92

When the price of a given type of hamster chow increased by 20%, 20% more units were produced and sold. Calculate the appropriate elasticity. You will interpret this answer in the next question.Enter only numbers, a decimal point, and/or a negative sign as needed. Round all intermediate steps to four decimal places and your final answer to two decimal places.

1 (20% increase in Qs)/(20% increase in price) = (20%)/(20%) = 1.

A certain children's toy sells 4200 units when its price is $12 and 2600 units when its price is $18. Calculate its price elasticity of demand, using the technique in the PowerPoints. You will interpret this elasticity in the next question.Enter only numbers, a decimal point, and/or a negative sign as needed. Round your final answer to two decimal places as necessary; if you round on intermediate steps, use four places.

1.18.

When incomes in a given country rose by 12%, demand for a certain type of pasta rose by 15%. Calculate the appropriate type of elasticity, using the methodology in the PowerPoints. You will interpret your answer in the next question.Enter only numbers, a decimal point, and/or a negative sign as needed. Round your answer to two decimal places as necessary; if you round on intermediate steps, use four places.

1.25 (15%)/(12%) = 1.25

When the price of Good 1 changed from $6 per unit to $7 per unit, demand for Good 2 changed from 4000 units to 5000 units. Calculate the appropriate elasticity. You will interpret your findings in the next question.Enter only numbers, a decimal point, and/or a negative sign as needed. Round your answer to two decimal places as necessary; if you round on intermediate steps, use four places.

1.44

Use the information from the previous question to calculate the firm's total revenue when the selling price is $20 per bag of dog food.Enter only numbers, a decimal point, and/or a negative sign as needed. Round your answer to two decimal places as necessary.

200000 $20 x 10,000 = $200,000.

When a price ceiling is non-binding, the ceiling price is _____ the equilibrium price; when a price ceiling is binding, the ceiling price is ______ the equilibrium price.

above; below

You must select all correct answers to get points for this question if more than one applies: Goods 1 and 2 just described are:

complements

Consider a demand curve that is a straight downward-sloping line and has its midpoint at a price of $4 and a quantity of 8 million units. At a price of $5, price elasticity of demand would be:

elastic

A binding minimum wage law is an example of a price ______ and results in a ______ of labor.

floor; surplus

In the real world, supply for a firm

gets more inelastic the more it produces and the supply curve gets steeper

A price floor tries to keep prices ______ and, when non-binding, is put at a price _____ the equilibrium price.

high; below

Price elasticity of demand can tell us, or at least give us a very good idea,

how steep or flat the demand curve is

With respect to price, supply of the books just discussed is:

inelastic

A rent control as discussed in the PowerPoint _____ generally thought of as a good idea by economists. It is an example of a price ______.

is not; ceiling

You must select all correct answers (if more than one are true) to get points for this question:The pasta just described is a(an):

luxury good normal good

When supply is perfectly elastic the supply curve is vertical producers don't respond at all to a change in price the denominator of the price elasticity of supply formula is greater than its numerator none of the listed options will likely be true this would most likely be at high production levels

none of the listed options will likely be true

When a certain brand of dog food sells for $20 per bag, 10,000 units are sold; when the price changes to $32, 7800 units are sold. Total revenue ____ as the price changes from $20 to $32, and with respect to price demand for this dog food is _____.You will work with this data again in the next question.

rises; inelastic

You must select all correct answers (if more than one are true) to get points for this question:Goods 1 and 2 just described are:

substitutes

The previous question was describing

unit elastic price elasticity of supply