Unclear Question 31 4 pts Question 32 4 pts Given what was stated in the previou
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Unclear Question 31 4 pts Question 32 4 pts Given what was stated in the previous problem for video games in the early 1980s what happens to the quantity of the video games? Consider the market for video games in the early 1980s. Due to looser licensing laws, more and more companies(firms) were producing video games. Due to a major fall in the quality of video games, people's tastes and preferences moved to other forms of entertainment. What happens to the price of the video games? Decreases Decreases Increases Increases Stays the same Stays the same Unclear Unclear Question 30 2 pts Unclear Suppose you have the following information for the demand for toddler walkers: P1- 20 Q1 100 Question 29 2 pts P2- 10 Q2 150 Consider oil which has a PED of -2.4. What does this number mean? Which of the following is true? An increase in tastes and preferences will causes a greater change in the price than the quantity Buyers will buy the product even if the price rises by a large amount PED for toddler walkers is inelastic Its demand is inelastic A decrease in costs will cause a greater change in the quantity than the price O The good likely has at least some substitutes O The good has no complements The quantity demanded will fall a lot if the price increases by a lotExplanation / Answer
29) Since price elasticity is greater than 1 in absolute terms, it is elastic implying a slight increase in price causes a greater reduction in consumption. This is possible when many substitutes are available. (Third option)
30) Using mid point method, price elasticity is -0.6 so demand is inelastic. (Second option)
31) Decreases (first option) because demand will decrease and this will cause demand to shift left.
32) Decreases (first option) because demand will decrease and this will cause demand to shift left. Price and quantity both fall.
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