1. The demand curve for tickets to the George Winston concert (with special gues

Question

1. The demand curve for tickets to the George Winston concert (with special guest star, Kenny G) is given as follows: Q = 100 - 0.1P At a price of $30, what is the consumer surplus from concert tickets? A) $0 B) $20 C) $970 D) $2910 E) $47045 Explain Answer:

2. Suppose demand is given by Qd = 1000 – 50P and supply is given by Qs = 50P. At the equilibrium price and quantity, the price elasticity of demand is A -1 B-25 C -1/3 D -10 Explain answer

3. A number of empirical studies of automobile demand yielded the following estimates of income and price elasticities:
Assume that income and price effects on automobile sales are independent and additive. Assume also that the auto companies intend to increase the average price of an automobile by about 6% in the next year and that next year's disposable personal income is expected to be 4% higher than this year's. If this year's automobile sales were 11 million units, how many would you expect to be sold under each pair of price and income demand elasticity estimates?
Study Income Elasticity Price Elasticity Chow 3 -1.2 Alkinson 2.5 -1.4 Roos and Von Szeliski 2.5 -1.5 Suits 3.9 -1.2
Explain answer
1. The demand curve for tickets to the George Winston concert (with special guest star, Kenny G) is given as follows: Q = 100 - 0.1P At a price of $30, what is the consumer surplus from concert tickets? A) $0 B) $20 C) $970 D) $2910 E) $47045 Explain Answer:

2. Suppose demand is given by Qd = 1000 – 50P and supply is given by Qs = 50P. At the equilibrium price and quantity, the price elasticity of demand is A -1 B-25 C -1/3 D -10 Explain answer

3. A number of empirical studies of automobile demand yielded the following estimates of income and price elasticities:
Assume that income and price effects on automobile sales are independent and additive. Assume also that the auto companies intend to increase the average price of an automobile by about 6% in the next year and that next year's disposable personal income is expected to be 4% higher than this year's. If this year's automobile sales were 11 million units, how many would you expect to be sold under each pair of price and income demand elasticity estimates?
Study Income Elasticity Price Elasticity Chow 3 -1.2 Alkinson 2.5 -1.4 Roos and Von Szeliski 2.5 -1.5 Suits 3.9 -1.2
Explain answer
1. The demand curve for tickets to the George Winston concert (with special guest star, Kenny G) is given as follows: Q = 100 - 0.1P At a price of $30, what is the consumer surplus from concert tickets? A) $0 B) $20 C) $970 D) $2910 E) $47045 Explain Answer:

2. Suppose demand is given by Qd = 1000 – 50P and supply is given by Qs = 50P. At the equilibrium price and quantity, the price elasticity of demand is A -1 B-25 C -1/3 D -10 Explain answer

3. A number of empirical studies of automobile demand yielded the following estimates of income and price elasticities:
Assume that income and price effects on automobile sales are independent and additive. Assume also that the auto companies intend to increase the average price of an automobile by about 6% in the next year and that next year's disposable personal income is expected to be 4% higher than this year's. If this year's automobile sales were 11 million units, how many would you expect to be sold under each pair of price and income demand elasticity estimates?
Study Income Elasticity Price Elasticity Chow 3 -1.2 Alkinson 2.5 -1.4 Roos and Von Szeliski 2.5 -1.5 Suits 3.9 -1.2
Explain answer

Explanation / Answer

1.

Correct Answer:

E

Explanation:

Q = 100-.1P

At P = $30,      

Q = 100-.1*30 = 97

At Q = 0

P = 100/.1 = 1000

So,

Consumer surplus = (1/2)*(97)*(1000-30) = $47045

2.

Correct Answer:

A

Explanation:

At equilibrium,

Supply = Demand

50P = 1000 – 50P

50P + 50P = 1000

100P = 1000

P = $10

Q = 50*10 = 500

Now, demand equation is: Q = 1000-50P

Then,

dQ/dP = -50

So,

Price elasticity of demand = (dQ/dP)*(P/Q) = (-50)*(10/500)

Price elasticity of demand = -1

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