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- Subject: Manegerial economics & policy Mcq's 6) If a 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price then the price elasticity of demand for spinach is 0.5 20 2 10 7) A good with a horizontal demand curve has an elasticity of infinity zero less than 1 None of the above 8) Which of the following is not a cause of the shift in demand for a product? change in price of product Change in the price of substitute Change in the income of a consumer None of the above5. T he price of a good rises from $16 to $24, andthe quantity supplied rises from 90 to 110 units.Calculated with the midpoint method, the priceelasticity of supply isa. 1/5.b. 1/2.c. 2.d. 5.True or False (explain why) The supply function is Qs = 85 + 0,5P, when the price is $100, then quanity supplied of X is 350 units
- Q a. The prices of vehicles dropped down in the market. Describe its effect on the supply ofvehicles in the market. Explain it with the help of diagram? Qb. The supply curve is positively sloped. If there is a change in price then what will happen to thequantity supplied? Furthermore if non price factors does not remain constant then how will be thequantity supplied effected?Given market demand Qd=50-p, and market supply P=Qs+5 a).find the market equilibrium price and quantity? b).what would be the state of the market if market price was fixed at birr 25 per unit? c).caculate and interpret price elasticity of demand at the equilibrium poibt?2. The demand for good X is given by:d= 6,000 - 0.5Px - Py +9Pz + 0.1MQxResearch shows that the prices of related goods are given by Py = $6,500 and Pz = $100, while theaverage income of individuals consuming this product is M = $70,000.a. Indicate whether goods Y and Z are substitutes or complements for good X.b. Is X an inferior or normal good?c. How many units of good X will be purchased when Px = $5,230?d. Determine the demand function and inverse demand function for good X. Graph the demand curve forgood X.
- Find equilibrium Price and quantity from the following demand and supplyfunctions, also determine whether demand is elastic or inelastic.i. Qd=95-3P 2 Qs= -10+6Pii. Qd=1400-60P Qs= -400+30PB. Yesterday price of the pencils box was Rs 60 a box, and Ali was willing to buy12 boxes. Today the price goes up to Rs 84 a box, and now Ali is willing to buy 8boxes. Is Ali’s demand for a pencil box is elastic or inelastic? What is Ali’selasticity of demandIf the price of product M increases from $80 to $100, the quantity supplied for product M will increase from 850 to 1150 o What is price elasticity of supply for product M?If the market price of pizza falls from $15 to $12, the quantity supplied for pizza will drop from 2000to 1500. o What is price elasticity of supply for pizza withrespect toa) original price of pizza?b) new price of pizza?c) midpoint-price of pizza?Only typed answer A firm produces two different goods, with demand given by the following: Pa = 500 – 15Qa - 2Qb and Pb = 200 – 2Qb Where Pa = price of good A, Pb = price of good B, Qa = quantity of good A and Qb = quantity of good B. There are 50 units of each good in storage (HINT: think about MC). Determine optimal prices and quantities for each good.
- Suppose demand and supply are given by Qd = 40 − P and Qs = 1.0P − 10.a. What are the equilibrium quantity and price in this market?Equilibrium quantity: Equilibrium price: $Suppose the demand and supply curves for a product is given by ? = 500 − 2? ? = −100 + 3? a) Which is the supply curve and why? c) Compute the equilibrium price and quantityc. Now assume better feeds increase milk production. When this happens within the above milk market, the_______(type either demand or supply) curve will shift to the__________(type right or left), which will__________(type either increase or decrease) the price of milk and__________(type either increase or decrease) the quantity of milk produced and sold.