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notice that each multiple choice has 4 answers, i tried to edit it but i could n

ID: 1203401 • Letter: N

Question

notice that each multiple choice has 4 answers, i tried to edit it but i could not.

Question 3

At the market equilibrium, consumer surplus is equal to $45 and producer surplus is equal to $25. What is total surplus?

$0

$20

$45

d. $70

____________________________________________________________________

Question 4

If the equilibrium price of a rose is $25 per dozen, then at a price of $20 there will be ______________.

a shortage of roses

a surplus of roses

equality between quantity of roses supplied and quantity of roses demanded.

d. more downward pressure on the price of roses

____________________________________________________________

Question 5

Suppose that the price elasticity of demand for a good is -0.67. This indicates that the good is a(n) ___________ good.

elastic

inelastic

inferior

d. normal

_____________________________________________________________

Question 6

Suppose that the income elasticity of demand for a good is -0.42. This indicates that the good is a(n) ____________ good.

a. complementary

b. substitute

c. inferior

d. normal

__________________________________________________

Question 7

Suppose that you sell avocados and you are considering raising the per unit price. If you increase the price by 10% this will decrease the quantity demanded of avocados by 7%. This tells you that increasing the price by 10% will _______________ your total revenue from selling avocados.

increase

decrease

not change

d. Not enough information.

_______________________________________________

Question 8

Which of the following is not a determinant of the price elasticity of demand for a good?

availability of close substitutes

time frame

factory capacity

d. share of the consumer's budget

________________________________________

Question 9

Free Response: Suppose that a 5% decrease in the price of chocolate bars will lead to a 7% increase in the quantity demanded of chocolate bars. What is the absolute value of the price elasticity of demand for chocolate bars?

___________________________________________________

Question 10

Suppose that at a price of $75, the quantity demanded for rooms at the Seaside Hotel is 84 rooms. If the owners increase the price to $125, then the quantity demanded falls to 56 rooms. Calculate the absolute value of the price elasticity of demand using the midpoint method.

  

a.

$0

b.

$20

c.

$45

d. $70

____________________________________________________________________

Question 4

If the equilibrium price of a rose is $25 per dozen, then at a price of $20 there will be ______________.

a.

a shortage of roses

b.

a surplus of roses

c.

equality between quantity of roses supplied and quantity of roses demanded.

d. more downward pressure on the price of roses

____________________________________________________________

Question 5

Suppose that the price elasticity of demand for a good is -0.67. This indicates that the good is a(n) ___________ good.

a.

elastic

b.

inelastic

c.

inferior

d. normal

_____________________________________________________________

Question 6

Suppose that the income elasticity of demand for a good is -0.42. This indicates that the good is a(n) ____________ good.

a. complementary

b. substitute

c. inferior

d. normal

__________________________________________________

Question 7

Suppose that you sell avocados and you are considering raising the per unit price. If you increase the price by 10% this will decrease the quantity demanded of avocados by 7%. This tells you that increasing the price by 10% will _______________ your total revenue from selling avocados.

a.

increase

b.

decrease

c.

not change

d. Not enough information.

_______________________________________________

Question 8

Which of the following is not a determinant of the price elasticity of demand for a good?

a.

availability of close substitutes

b.

time frame

c.

factory capacity

d. share of the consumer's budget

________________________________________

Question 9

Free Response: Suppose that a 5% decrease in the price of chocolate bars will lead to a 7% increase in the quantity demanded of chocolate bars. What is the absolute value of the price elasticity of demand for chocolate bars?

___________________________________________________

Question 10

Suppose that at a price of $75, the quantity demanded for rooms at the Seaside Hotel is 84 rooms. If the owners increase the price to $125, then the quantity demanded falls to 56 rooms. Calculate the absolute value of the price elasticity of demand using the midpoint method.

Explanation / Answer

Dear Student, only one question is allowed at a time.

Q3)

Total Surplus = Consumer Surplus + Producer Surplus

= $45 + $25 = $70.

So, option D is the correct option.