The following graph will represent U.S. dollars on the y-axis and lbs. on the x-
ID: 2494554 • Letter: T
Question
The following graph will represent U.S. dollars on the y-axis and lbs. on the x-axis.
Good X
Good Y
22) Refer to the figure above. Calculate the price elasticity when more producers expect prices to decrease tomorrow leading to an increase of 4 lbs. in the Good X market.
A) EpD = 0.73
B) EpS = 1.38
C) EpD = 1.38
D) EpS = 0.73
23) From number 22 (point B), calculate the price elasticity when a hurricane strikes leading to a 1 lb. decrease in the Good X market.
A) EpD = 2.44
B) EpS = 2.44
C) EpD = 0.41
D) EpS = 0.41
24) From number 23 (point C), calculate the price elasticity when Americans prefer Good X by 3 lbs.
A) EpD = 0.73
B) EpS = 1.38
C) EpD = 1.38
D) EpS = 0.73
25) From number 24 (point D), calculate the price elasticity when the cost of inputs rises in Good X thereby leading to a decrease of 3 lbs.
A) EpD = 1.04
B) EpS = 1.04
C) EpD = 0.96
D) EpS = 0.96
The following graph will represent U.S. dollars on the y-axis and lbs. on the x-axis.
Good X Good Y
26) Refer to the figure above. Calculate the price elasticity when producers increase prices by $4.00 in the Good X market.
A) EpD = 1.25
B) EpS = 0.57
C) EpD = 0.57
D) EpS = 1.25
27) From number 26, the Good X market is experiencing a market failure. What is happening in Good X?
A) There is a shortage
B) There is a surplus
C) Consumers consume more
D) Producers produce less
28) From number 27, calculate the price elasticity when the cost of input in Good Y increases leading to a 4 lb. decrease.
A) EpD = 1.91
B) EpS = 0.94
C) EpD = 0.94
D) EpS = 1.91
29) From number 28, calculate the price elasticity when consumers expect prices of Good Y to increase tomorrow leading to a 3 lb. increase.
A) EpD = 3.06
B) EpS = 3.06
C) EpD = 0.33
D) EpS = 0.33
30) From number 29, calculate the price elasticity when technology is introduced in Good Y leading to a 4 lb. increase.
A) EpD = 1.52
B) EpS = 1.52
C) EpD = 0.66
D) EpS = 0.66
12 So 101 8 6 4 2 Do 5 10 15Explanation / Answer
Multiple questions asked.
Q1 is answered below.
Market equilibrium P=$7 and Q=8 units.
When prices are expected to decrease tomorrow, making Q=8+4 = 12 units, then P becomes $4 (SS shifts to the right today)
Thus, Price elasticity of supply = (Change in Q/Change in P)(P/Q)
Price elasticity = (4)/(7-4)×(7/8)
Price elasticity = 1.167
Thus, correct option: (B) EpS = 1.38 (approx)
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