Econ 201 CH 2 Assessment
A. B. 2 hours C. 3 hours D. the same as
Consider Ron's demand for after school care for his children. The marginal benefit Ron receives for every hour of childcare is provided in the accompanying table. After school childcare(hours per day)/Marginal benefit ($ per hour) 1/$32 2/$30 3/$20 4/$14 a. Utilizing the information in the table, move the points in the first graph to plot Ron's marginal benefit curve, and move the points in the second graph to plot Ron's demand curve. b. If an hour of childcare costs $24, how many hours will Ron purchase each day? Assume Ron can only purchase care in one-hour increments (no partial hours). c. If an hour of childcare costs $18, how many hours will Ron purchase each day? Assume Ron can only purchase care in one-hour increments (no partial hours). d. Ron's marginal benefit curve is _____ his demand curve.
An increase in the price of a ticket will not cause a decrease in demand, but rather a decrease in quantity demanded.
Consider the following statement: "An increase in the cost of oil will cause the price of a plane ticket to increase. This increase in price will cause a decrease in demand for airline travel and a leftward shift in the demand curve." What is the flaw of this reasoning? The cost of oil affects supply and not demand so prices of tickets will remain the same. An increase in the price of a ticket will not cause a decrease in demand, but rather a decrease in quantity demanded. The increase in the cost of oil will cause a decrease in the price of a plane ticket. A decrease in demand will shift the curve rightward, not leftward.
A. shift left B. shift right
Consider the market demand curve for the Samsung Galaxy smartphone. Use a graph to illustrate the effect, if any, each given scenario has on the demand for Samsung Galaxy smartphones. a. The batteries in Samsung smartphones begin to spontaneously combust. b. Apple increases the price of the newest iPhone by 10%.
a. normal b. inferior c. normal
Determine whether each good is a normal good or an inferior good for the average consumer. a. For most consumers, the newest iPhone is a ______ good. b. For most consumers, a 10-year-old used car is an _____ good. c. For most consumers, dental services are a _____ good.
A. complements, shift left B. substitutes, shift right C. complements, shift left
For each pair of goods, identify if the goods are substitutes or complements. Next, use a graph to illustrate how a change in the price of one good impacts the other good. a. In the market for gasoline and sport utility vehicles (SUVs), the two goods are _____. If the price of gasoline rises, what response do you expect in the market for SUVs? Shift the demand curve left or right? b. In the market for transportation, taking the train and taking a plane are _____. If the price of airfare rises, what response do you expect in the market for train travel? Shift the demand curve left or right? c. In the market for smartphones and Verizon data plans, the two goods are _______. If the price of data plans rise, what response do you expect in the market for smartphones? Shift the demand curve left or right?
A. shift right B. shift left C. move right along the curve
Illustrate graphically how each of the following events will impact the demand for cups of coffee. a. Average hourly wages increase in the U.S. b. The state of California requires all coffee houses to post warnings to consumers about the cancer-causing components of coffee. c. Coffee houses increase the price of coffee in order to pay their baristas more.
A. 500, 400, 300, 200, 100 C. three trips
Kathy is attending school in Philadelphia. Each year she returns home to visit her family and friends in New York City. Kathy's annual demand curve for train tickets from Philadelphia to New York is provided in the accompanying graph. a. First, determine how much benefit Kathy receives from each trip home: Kathy receives $ ____ of marginal benefit from the first trip. Kathy receives $ ____ of marginal benefit from the second trip. Kathy receives $ ___ of marginal benefit from the third trip. Kathy receives $ ___ of marginal benefit from the fourth trip. Kathy receives $ ____ of marginal benefit from the fifth trip. b. Next, place point A on the graph to demonstrate how many trips Kathy will take if the price is $230 per round-trip ticket. c. If the price of a round-trip ticket is $230, how many trips should Kathy take? one trip two trips five trips four trips three trips
b. negative
Suppose Grubhub, a food delivery service, has recently expanded to your area. The accompanying table contains the number of deliveries per month that you demand at various delivery prices. a. Use this information to plot your individual demand curve. Drag each point on the graph to the point that corresponds with the information presented in the table. b. In general, the slope of the demand curve is
move up the original demand curve
The current administration imposes an unannounced tariff on steel imports which causes the price of new cars to increase overnight. Use the graph provided to illustrate the impact of this on the demand curve for new cars. You may either shift the demand curve or move the labeled point to illustrate a change in quantity demanded.
.
The marginal benefit received for each gallon of gasoline consumed per week for Ang, Tony, and Gianna are provided in the accompanying table. Gallons consumed per week Ang's marginal benefit: 1: $7 2: $5 3: $3 4: $1 Tony's marginal benefit: 1: $4 2: $3 3: $2 4: $1 Gianna's marginal benefit: 1: $8 2: $6 3: $4 4: $3 a. On the first graph, move the points to plot an individual demand curve for each person. b. Assuming there are only these three people in the market, create the market demand curve for gasoline on the second graph. Move each of the points of the market demand curve provided to plot the appropriate market demand according to the dataset provided. Round down to the nearest whole gallon for each consumer.
complements, increase
When Sony released the PlayStation 4, it was reported that Sony was taking a loss of $60 on every PS4. However, Sony expected to make this up with sales of PS+ subscriptions and increased royalties from video games. Use the interdependence principle to help explain this strategy. The PS+ subscriptions allow PS4 owners to play their games online, receive new games monthly to download at no charge, and receive additional special discounts on other items. Therefore, the PS4 and PS+ subscriptions are _______ in consumption. Decreasing the price of the PS4 will _______ the demand for PS+ subscriptions. Sony expects that revenue from recurring PS+ subscriptions will be larger than the loss in revenue from PS4 sales.
do not violate the law of demand because your preference for the product changed after you experienced the good.
You just took an Uber from home to campus for the first time and were willing to pay $13 for the trip. It was so much easier than driving yourself that you are willing to pay $21 for the same trip tomorrow. Determine if you have violated the law of demand based on your choices, and why or why not that is the case. Your decisions do violate the law of demand because the law of demand states that quantity demanded decreases as price increases. do not violate the law of demand because the law of demand states that quantity demanded increases as price increases. do violate the law of demand because you have chosen to buy the same amount of the product at two different prices. do not violate the law of demand because your preference for the product changed after you experienced the good.
a. survey customers add up the total quantity demanded by the customers at each price point scale up the quantities demanded by the survey respondents plot the demand curve b. consumer demographic information existing competition in the market
A team of analysts at Amazon is researching the viability of producing a smart watch. How might they estimate potential demand for their smart watch? a. Consider the four-step process that many companies follow to estimate the market demand curve for their product. Place the steps in order, with the first step in the highest position and the last step in the lowest position. scale up the quantities demanded by the survey respondents plot the demand curve add up the total quantity demanded by the customers at each price point survey customers b. Select two factors that the analysts want to keep in mind to create the most accurate demand estimates. consumer demographic information existing competition in the market information about climate change cost of inputs to production
Price per flight / Quantity demanded per day $200 / 1,350 $300/ 1,250 $400 / 1,150 $500 / 1,050 $600 / 950 $700 / 850
As part of the marketing team at Delta airlines, you must develop a strategy to increase demand for flights between Kansas City and Detroit. You examine data from previous flights and determine that the existing demand for flights between the two cities is as given in the accompanying table. Price per flight/ Quantity demanded per day $200/1,200 $300 / 1,100 $400 / 1,000 $500 / 900 $600 / 800 $700 / 700 a. Your team launches a viral advertising campaign that is so successful that all existing consumers increase their willingness to pay by $100, and 50 new customers demand flights at every price. How will this affect the quantity demanded per day? b. Use the graph provided to plot the original demand curve using D1. Use the end points to plot the curve, as it will be a straight line. Next, plot the new demand curve from part a using D2, Again plot the end points only.
A. decrease the length of your showers turn water off while brushing your teeth B. does
Consider your current uses of tap water. Think about some of the ways that you use water that are beyond what is necessary to sustain life. a. If the price of tap water triples, what are some likely changes that you will make to your consumption of tap water? (choose all that apply) decrease the length of your showers leave water running while brushing your teeth turn water off while brushing your teeth increase the length of your showers b. In general, the consumption of tap water _____ obey the law of demand.
