Consider the product of gasoline. Its PES is estimated at 1.6. Which of the following would be true? a) Gasoline’s supply is inelastic b) Its supply curve is a steep, upward sloping line c)Its supply curve is a vertical line d) Its supply curve is a flat, upward sloping line e) None of the above 2. Think about the market for gasoline again. Due to the rise of electrical and hybrid cars, there is a decrease in tastes and preferences for gasoline. What is the effect on this market? a) Price falls and quantity increases b) There is a greater decrease in quantity than in the price c)There is a greater increase in quantity than in the price d) The demand curve will become more steep e) None of the above 3. Please complete the following sentence. The more inelastic the supply curve... a) the more consumer surplus created by implementing a tax on a product b) the greater the tax burden on the buyers c)the greater the tax burden on the sellers d) the more a shift in the demand curve causes a greater change in the quantity than in the price e) None of the above 4. Consider a study of the telecommunications industry in Mexico. According to the data, the lack of competition in the industry leads to consumer surplus being $25 billion lower per year than if there was more competition. What does this number mean? a) Tells us the decline in the amount of money people spend on telecommunications per year b) Tells us the increase in the price that people need to pay for telecommunications per year c)Tells us the decline in the consumption of telecommunications per year d) Tells us the decline in the net benefit to consumers of this industry per year due to the lack of competition e) None of the above

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 8E: Bell Greenhouses has estimated its monthly demand for potting soil to be the following: N=400+4X...

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Question

Consider the product of gasoline. Its PES is estimated at 1.6. Which of the following would be true?

a) Gasoline’s supply is inelastic

b) Its supply curve is a steep, upward sloping line

c)Its supply curve is a vertical line

d) Its supply curve is a flat, upward sloping line

e) None of the above

2. Think about the market for gasoline again. Due to the rise of electrical and hybrid cars, there is a

decrease in tastes and preferences for gasoline. What is the effect on this market?

a) Price falls and quantity increases

b) There is a greater decrease in quantity than in the price

c)There is a greater increase in quantity than in the price

d) The demand curve will become more steep

e) None of the above

3. Please complete the following sentence. The more inelastic the supply curve...

a) the more consumer surplus created by implementing a tax on a product

b) the greater the tax burden on the buyers

c)the greater the tax burden on the sellers

d) the more a shift in the demand curve causes a greater change in the quantity than in the price

e) None of the above

4. Consider a study of the telecommunications industry in Mexico. According to the data, the lack of

competition in the industry leads to consumer surplus being $25 billion lower per year than if there

was more competition. What does this number mean?

a) Tells us the decline in the amount of money people spend on telecommunications per year

b) Tells us the increase in the price that people need to pay for telecommunications per year

c)Tells us the decline in the consumption of telecommunications per year

d) Tells us the decline in the net benefit to consumers of this industry per year due to the lack of

competition

e) None of the above

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