15) Suppose that the equilibrium price of pickles falls while the equilibrium qu
ID: 1120243 • Letter: 1
Question
15) Suppose that the equilibrium price of pickles falls while the equilibrium quantity 15) rises. The most consistent explanation for these observations is: A) a decrease in the supply of pickles and a decrease in the demand for pickles. B) an increase in the supply of pickles with no change in demand. C) an increase in demand for pickles with no change in supply D) a decrease in demand for pickles with no change in supply. 16) 16)If consumers respond to a 10% price reduction by buying twice as much of a particular good, we would conclude that: A) there was excess supply at the original price. B) the price elasticity of demand at the original price was less than one. C) the price elasticity of demand at the original price was greater than one. D) there was excess demand at the original price. The reason a brand name item (eg. Tyson chicken) has a larger price elasticity than a class of items (e.g., chicken) is that: 17) A) the B) there are fewer substitutes for chicken generally than for Tyson chicken. C) it takes a lot of time to adjust to a substitute brand of chicken D) there are fewer substitutes for Tyson chicken than for chicken generally. share of income spent on "chicken" is larger than spent on "Tyson Chicken". 18) The price elasticity of demand equals 1: A) at the midpoint of a straight-line demand curve. B) whenever the slope of a straight-line demand curve is greater than 1 in absolute value. C) whenever the slope of a straight-line demand curve is less than I in absolute value. D) whenever the slope of a straight-line demand curve equals zero. 19) 19) When Joe's Gas raises its price for regular unleaded gasoline, total revenue from regular unleaded gas falls to zero. It must be the case that A) there are not many good substitutes for Joe's regular unleaded gasoline B) consumers are switching to premium grades of gasoline. C) the demand for Joe's regular unleaded gasoline is perfectly elastic. D) the demand for Joe's regular unleaded is inelastic. 20 20) Suppose an increase in the price of golf clubs from $75 to $125 leads to an increase in quantity supplied from 200 units to 300 units. The price elasticity of supply for golf clubs at the original price of $75 is , so supply is Di2: inelastic A) 3/4; inelastic B) 4/3; elastic C) 2; elastic 21) During Thanksgiving you participated in a pumpkin-pie eating contest. You really enjoyed the first two pies, the third one was okay, but as soon as you ate the fourth one you became ill and lost the contest. You got utility from eating the first pie than from eating the third pie. A) more C) the same amount of B) less D) less variableExplanation / Answer
15) (C) an increase in demand for pickles with no change in supply
When the price of pickle falls it is very much possible that th demand will increase and there is no change in the supply as per the sentence, because here it is the direct relationship between price and demand.
16) (B) the price elasticity of demand at the original price was less than one
There is a direct relationship between demand and price, if by reducing the price by 10% the demand goes up means that the elasticity of price was less than one so to make it equal to one the reduction of price was important.
17) (D) there are fewer substitutes for Tyson chicken than for chicken generally
The number of substitutes determines the elasticity of demand. Tyson chicken will have less subsititutes and a brand value so its elasticity of price is large.
18)(A) at the midpoint of a straight line demand curve
Demand wll be unit elastic i.e, the percent change in demand will be equal to the percent change in price when the price elasticity of demand is equal to 1. So, it change in demand = change in price, so it will be at the midpoint only.
19) (A) there are not many good substitutes for Joe's regular unleaded gasoline
There might not be good substitutes for regular unleaded gasoline there fore even after price rise the demand for it did not decrease but revenue form regular as fell rather.
20)(A) 3/4 ; inelastic
21) (A) more
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.