Use the demand curve diagram below to answer the following TWO questions.ġ. If goods X and Y are COMPLEMENTS, the which of the following could be the value of cross price elasticity of demand?ĭ) All of the above could be the value of cross price elasticity of demand. If pizza is a normal good, then which of the following could be the value of income elasticity of demand?Ĩ. ![]() ![]() If goods X and Y are SUBSTITUTES, then which of the following could be the value of the cross price elasticity of demand for good Y?ħ. What does (the absolute value of) own price elasticity of demand equal?Ħ. Suppose that a 10 increase in price results in a 50 percent decrease in quantity demanded. Which of the following is the correct interpretation of this number?Ī) A 1% increase in price will result in a 50% increase in quantity supplied.ī) A 1% increase in price will result in a 5% increase in quantity supplied.Ĭ) A 1% increase in price will result in a 2% increase in quantity supplied.ĭ) A 1% increase in price will result in a 0.5% increase in quantity supplied.ĥ. Suppose you are told that the own-price elasticity of supply equal 0.5. If own-price elasticity of demand equals 0.3 in absolute value, then what percentage change in price will result in a 6% decrease in quantity demanded?Ĥ. Own-price elasticity of demand is equal to:ģ. Suppose that a 2% increase in price results in a 6% decrease in quantity demanded. What is the own-price elasticity of demand as price increases from $2 per unit to $4 per unit? Use the mid-point formula in your calculation.Ģ. Use the demand curve diagram below to answer the following question. They are duplicates of the questions found in the Topic sub-sections. All the following questions are from previous exams for Economics 103.
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