Multiple choice questions.

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1.The price elasticity of need is: a) the proportion of the percentage adjust in quantity demanded come the percentage readjust in price. b) the responsiveness of revenue come a adjust in quantity. C) the proportion of the change in quantity demanded separated by the readjust in price. D) the solution of revenue come a adjust in price.

2.If need is price elastic, then: a) a climb in price will raise full revenue. B) a loss in price will raise full revenue. c) a autumn in price will reduced the quantity demanded. D) a climb in price won"t have any effect on complete revenues.

3. Complementary goods have: a) the same elasticities that demand. B) really low price elasticities that demand. C) an adverse cross price elasticities of demand with respect to every other. d) positive revenue elasticities that demand.

4. The price elasticity of demand generally often tends to be: a) smaller in the lengthy run than in the quick run. B) smaller sized in the brief run than in the long run. c) bigger in the short run than in the long run. D) unrelated come the length of time.

5. If the price elasticity of supply of doodads is 0.60 and also the price increases by 3 percent, then the quantity gave of doodads will climb by a) 0.60 percent. B) 0.20 percent c) 1.8 percent d) 18 percent.

6. Suppose we recognize that the price elasticity of need of great X is same to -1.2. Then, if that is price will rise by 5%, we deserve to predict with certainty the a) amount demanded of that an excellent will increase. B) the revenue that the firm creating that great will boost by 6%. C) the revenue the the firm developing that an excellent will decrease by 6%. D) the quantity demanded of that an excellent will to decrease by 6%. e) no one of the above.

7. A 10% increase in the price of movie ticket in Westridge 8 leads to a 15% to decrease in the number of tickets sold, indicating the need for movie ticket in Westridge 8 is: a) elastic. b) inelastic. C) unit elastic. D) can not tell native the info given.

8. If the cross-price elasticity between two assets is 1.5, a) the two items are luxury goods. B) the two items are complements. C) the two goods are substitutes. d) the two goods are normal goods.

True/False/Uncertain. because that each the the complying with statements, say even if it is it is true, false, or uncertain and explain your answer.

1. It is reasonable to expect the overcome price elasticity of need for golf clubs and also golf balls to it is in positive.

Golf clubs and golf balls room complementary goods. This means that, as the price that golf clubs boosts (a optimistic change), the usage of golf balls to reduce (a an adverse change). Cross price elasticity of need is same to the proportion of these changes and also will it is in negative. The declare is false.

2. If the demand is perfectly elastic, then a change in the supply curve go not influence the equilibrium price.

 True, since a perfect elastic demand curve is horizontal. Therefore, no matter what the shift is the equilibrium price will constantly remain the same. (See graph.) 3. The need curve because that autos is more elastic 보다 the need curve for Fords.

False. A Ford deserve to be substituted by a different model. That is no as simple to uncover a substitute for a vehicle in general. The more substitutes a an excellent has, the an ext elastic is the demand for the good. Therefore, need for Fords is much more elastic. 4. Suppose you very own a "Here come the Sun" tan salon and the need curve for your services is downward sloping. Further, suppose that a brand-new tanning salon referred to as "Sunny Delight" opens two blocks away from her salon. Tell even if it is the complying with three statements space true, false or uncertain and explain your answer.

a. The need curve for your solutions shifts come the right. This new salon is a substitute for her services. After it has actually appeared, your consumer have an ext choice, and some of lock will begin using the new salon. So the demand for your solutions will decrease, or shift to the left. The explain is false.

b. The need for your services becomes much more elastic. Among the factors determining the price elasticity of demand for the great is the number of substitutes. Much more substitutes - much more elastic demand. The declare is true.

c. The cross-price elasticity that the need for your services with respect to the price charged by "Sunny Delight" is negative. These two products (services) are substitutes. The cross-price elasticity that substitutes is positive, due to the fact that as the price of one of them increases, the need for (and as such the usage of) the various other one increases, too. The explain is false.

Short answer Question. 5. Originally Hans Johnson to be the only consumer in the sector for "Casa de Econ" beer, created by a little local brewery. Once the price that "Casa de Econ" six-pack varies between \$10 and \$20, the price elasticity of his individual demand is same to an unfavorable 1. Currently imagine that Hans has been copy 4 times, and also now we have actually 5 similar consumers in the industry for "Casa de Econ". What will occur to the price elasticity of market need in the price variety given above? will certainly the demand become more price elastic, much less price elastic, or will certainly elasticity stay the same? explain your answer.

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Since elasticity faces relative changes, it doesn"t matter how plenty of consumers we have actually in the sector as lengthy as every one of them are same. (If the amount demanded because that each the them changes by 50%, the would average the amount demanded in the whole market will readjust by 50%, too.) for this reason the price elasticity of need will remain the same.