.J 17. When the price 5- of norie tickts ncreasen trom 53 to $4, the number ot t
ID: 1105361 • Letter: #
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.J 17. When the price 5- of norie tickts ncreasen trom 53 to $4, the number ot tickets curve for movie tickbt creases from o0 per veek to 290 per weak. The deman the price range given,is a. inelastic b. unit elastio elastic dnot able to be determined from the infornation given I you were a government tax otticial interested in generating a large revenue from placing tag on the consuiption of a particular good, you should choose good for whichr a. the demand is: inelasti b. the demand is)elasti the demand iunitary elastic at all points d. the supply is perfectly eldotic of the following? a. why costs eventually se irP any production situation 19. h epe noiple of diatnishiag marginal utiliey ia used to explaia vh. a why a second gLias of yatereonsuned by someone who has at spent six houra in the deaeft has less value than the tirst glass of water consuned why the additions to output will eventually declina as mcrc b. c. variable factars of production are added to a fixed facter of production all f the abov@ d, 20. As a business executive iaterested in raising your total revrnue,you should never increasa your price if: a. the demand curve fos your product is a straight line b. the demand curve for product is not a straight l.ne cyou are already charging a price that is below the nidpoint on a curved demand function none Of the aboe 21. Suppose that socks cost 1 a pair and that shoes coat se9 a pair. Also assums that you wouid get 1o units of marginal utility from an additional pair of socks and 50 units of marginal utilicy from an additional pair of shoes. In an attenpt to move towar! consumer equilibrium, you should: buy an additional pair of shoes because the marginal utili derived from shoes is greater than the marginal utility derived a. b. buy an additional pair of socks because they cost less than an c. buy an additional pair of shoes because the total utility derived d. purchase an additional pair of socks because the marginal utility from socks additional pair of shoes rom shoes will always exceed the total utility from socks per dollar is greater for sogks than for shoeExplanation / Answer
17. Ed = % change in quantity demanded / % change in price
% change in quantity demanded = (290 - 300)/300 x 100 = - 3.33
% change in price = (4 - 3)/3 x 100 = 33.33
Ed = - 3.33/33.33 = - 0.09 < 1
Less than unit elasic.
Answer is a) Inelastic.
18. a) Demand is inelastic
Inelastic demand means change in price does minor change in demand of commodity. This helps government to earn more revenue.
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