Multiple selection questions.

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1.The price elasticity of need is: a) the ratio of the percentage readjust in amount demanded to the percentage change in price. b) the responsiveness that revenue to a adjust in quantity. C) the ratio of the change in amount demanded divided by the change in price. D) the response of revenue to a readjust in price.

2.If demand is price elastic, then: a) a increase in price will raise full revenue. B) a loss in price will raise total revenue. c) a fall in price will lower the amount demanded. D) a rise in price won"t have any type of effect on complete revenues.

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

4. The price elasticity of need generally has tendency to be: a) smaller sized in the long run than in the quick run. B) smaller in the brief run 보다 in the lengthy run. c) larger in the short run 보다 in the long run. D) unrelated to the size of time.

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

6. Expect we know that the price elasticity of demand of great X is equal to -1.2. Then, if the price will boost by 5%, we can predict through certainty the a) amount demanded that that good will increase. B) the revenue of the firm creating that great will increase by 6%. C) the revenue of the firm creating that an excellent will to decrease by 6%. D) the quantity demanded of that an excellent will decrease by 6%. e) no one of the above.

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

8. If the cross-price elasticity between two assets is 1.5, a) the two products are high-end goods. B) the two goods are complements. C) the two goods are substitutes. d) the two products are common goods.

True/False/Uncertain. for each that the following statements, say whether it is true, false, or uncertain and explain your answer.

1. The is reasonable to intend the overcome price elasticity of demand for golf clubs and also golf balls to be positive.

Golf clubs and golf balls room complementary goods. This means that, together the price the golf clubs rises (a hopeful change), the usage of golf balls to reduce (a an unfavorable change). Overcome price elasticity of need is same to the proportion of these changes and also will be negative. The explain is false.

2. If the demand is perfect elastic, then a shift in the it is provided curve does not impact the equilibrium price.

 True, because a perfectly elastic demand curve is horizontal. Therefore, no issue what the change is the equilibrium price will always remain the same. (See graph.) 3. The need curve because that autos is much more elastic 보다 the demand curve for Fords.

False. A Ford can be substituted by a various model. The is no as easy to discover a substitute because that a vehicle in general. The much more substitutes a great has, the much more elastic is the need for that good. Therefore, need for Fords is an ext elastic. 4. Suppose you very own a "Here come the Sun" demorphs salon and also the demand curve for your services is downward sloping. Further, intend that a brand-new tanning salon called "Sunny Delight" opens two blocks away from your salon. Tell whether the following three statements room true, false or uncertain and explain her answer.

a. The demand curve because that your solutions shifts to the right. This brand-new salon is a substitute for her services. ~ it has appeared, your consumer have more choice, and some of castle will start using the new salon. For this reason the need for your solutions will decrease, or transition to the left. The declare is false.

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

c. The cross-price elasticity of the need for your services with respect come the price charged by "Sunny Delight" is negative. These two goods (services) are substitutes. The cross-price elasticity that substitutes is positive, because as the price of among them increases, the need for (and thus the intake of) the various other one increases, too. The declare is false.

Short answer Question. 5. Initially Hans Johnson to be the only consumer in the market for "Casa de Econ" beer, developed by a tiny local brewery. As soon as the price that "Casa de Econ" six-pack varies in between \$10 and also \$20, the price elasticity that his individual need is equal to negative 1. Currently imagine that Hans has been cloned 4 times, and now we have 5 the same consumers in the industry for "Casa de Econ". What will take place to the price elasticity of market need in the price selection given above? will the demand become more price elastic, much less price elastic, or will certainly elasticity stay the same? describe your answer.

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Since elasticity deals with relative changes, it doesn"t issue how plenty of consumers we have actually in the market as long as every one of them space same. (If the amount demanded for each the them alters by 50%, the would typical the amount demanded in the whole market will change by 50%, too.) so the price elasticity of demand will stay the same.