17. When the price of movie tickets increases from $3 to $4, the number of ticke
ID: 1105653 • Letter: 1
Question
17. When the price of movie tickets increases from $3 to $4, the number of tickets sold decreases from 00 per week to 290 per veak. The demand curve for movie tickbts, ovas the price range given, is a.inelastic b unit elastio sC.elastic not ablo to be determsned from the information given 18. If you were a government ax official interested in generating a 1arge revenue from píacing a tax on the consumption of a particular good, you should choose good for which: the demand is: inelastic the demand is elasti c. the demand isunitary elastic at all points d. the supply is perfectly eldstic 19. The principle of diainishing marqinal utility is used to explain wh'a of the following? why costs eventually dlse i any production situation why a second gliss of water consumed by someone who has jaat a. spent six hours in thei deseft has less value than the tirst lass of water consumed a. why the additions to output will eventually decline as mcr variablo factars of production are added to a fixed facter of production al1 of the above d. 2 0. Aa a business executive iaterested in raising your total revrnue, you should never increasa your price if a. the demand curve fors your product is a straight line b. the demand curve for your product is not a straight 1.ne c.you are already charging a price that is below the uispoint on a d. none curved demand functionExplanation / Answer
17. c. Elastic.
(When demand is price sensitive, an increase in price would lead to a decrease in quantity demanded)
18. a. Demand is inelastic.
(When the demand is inelastic, an increase in price will increase revenue, and when demand is elastic, an increase in price would reduce revenue)
19. b. Why a second glass of water consumed by someone who has just spend six hours in the desert has less value than the first glass of water consumed.
20. d. None of the above.
(To increase revenue, a business executive should not raise price if the price is on the elastic portion of the demand curve.)
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