QUESTION 8 2 points Save Answer Suppose that as the price of Y falls from $10.00

Question

QUESTION 8 2 points Save Answer Suppose that as the price of Y falls from $10.00 to $6.00 the quantity of Y demanded increases from 100 to 140. Then the price elasticity of demand is: 4.00 2.09 1.33 67 QUESTION 9 2 points Save Answer If the income elasticity of demand for lard is -3.00, this means that: lard is a substitute for butter, O lard is a normal good lard is an inferior good O more lard will be purchased when its price falls. QUESTION 10 2 points Save Answer Jennifer buys a piece of costume jewelry for $33 for which she was willing to pay $42. The minimum acceptable price to the seller, Nathan, was $30. Jennifer experiences: O a consumer surplus of $12 and Nathan experiences a producer surplus of $3 O a producer surplus of $9 and Nathan experiences a consumer surplus of $3 a consumer surplus of $9 and Nathan experiences a producer surplus of $3 O a producer surplus of $9 and Nathan experiences a producer surplus of $12

Explanation / Answer

Ans)

8.

1.33

9.
more lard will be purchased when its price falls.
this is because lard has a very high price elasticity.

10.
a consumer surplus of $9 and Nathan experiences a producer surplus of $3.

Consumer surplus=willingness to pay-actually pays
=42-33
=9

Producer surplus=AMount received-minimum acceptable amount
=33-30
$3

Quantity midpoint=(Q1+Q2)/2 % change in quantity Price midpoint=(P1+P2)/2 Ep=% change in quantity demanded/% change in price Q1 Q2 P1 P2 % change in price 100 140 120 66.66666667 10 6 8 -50 -1.333333333

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