Answered: price elasticity point of demand

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...

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1. Given that the price elasticity point of demand is -3, if the price increases by 2%, how much the quantity demanded will change? a) 6% b) -6% c) 0.06% d) -0.06% 2. A seller can decrease the price when the demand is a) Elastic b) Inelastic c) Perfectly inelastic d) Perfectly elastic 3. A unit of good X is sold for RM2, and a unit of good Y is sold for RM4. Both are complementary goods. When the price of good X increases by RM0.50, the quantity demanded of good Y will change by 25%. Calculate the cross price elasticity for both of the goods. a) 0.1 b) -0.1 c) 1 d) -1 4. Based on Question 3, what are good X and good Y? a) Oil and Gas b) Sugar and Salt c) Printer and paper d) Cheese and Burger 5. If the price of good X increases from RM3 to RM5, the quantity demanded drops from 10 to 12. Find the slope of the demand curve. a) 0.2 b) 5 c)-1 d) -2 Other: 6. Based on Question 5. calculate the quantity when the price is equal to o. a) 13 b) 2 c) 10 d) 5 7. Based on Question 5, if the market price is equal to 1. determine how many units of good X will be sold in the market. a) cannot be determined b) 12 c) 10 d) 14 8. If the price of Pepsi increases, what will happen to the market price of Coke? a) remain unchanged b) decrease c) increase d) change

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