QUESTION 9 When thinking about withdrawals from the circular flow of income, what is the difference between savings and net savings? O a. Net savings take account of the tax paid on interest received Ob. Net savings are equal to savings plus borrowing O. Net savings are equal to savings minus borrowing d. Net savings include saving by firms, while savings do not include this QUESTION 10 Consider the diagram attached below which illustrates the market for apples. What sequence of events could cause the equilibrium to move from r to t? Market for apples.pdf a. The government has encouraged tree planting as a way of combatting global warming and people have begun to appreciate the health benefits of eating fruit Ob.A news story says that easting apples increases your life expectancy and farmers are getting greater yields from their fruit trees because they are using better fertilizers O. Farmers are using their apple crops to feed their pigs and consumers are concerned that the acid in fruit can damage tooth enamel O d. Pear trees have been damaged by a disease and in some parts of the country fires have destroyed apple orchards

QUESTION 9 When thinking about withdrawals from the circular flow of income, what is the difference between savings and net savings? O a. Net savings take account of the tax paid on interest received Ob. Net savings are equal to savings plus borrowing O. Net savings are equal to savings minus borrowing d. Net savings include saving by firms, while savings do not include this QUESTION 10 Consider the diagram attached below which illustrates the market for apples. What sequence of events could cause the equilibrium to move from r to t? Market for apples.pdf a. The government has encouraged tree planting as a way of combatting global warming and people have begun to appreciate the health benefits of eating fruit Ob.A news story says that easting apples increases your life expectancy and farmers are getting greater yields from their fruit trees because they are using better fertilizers O. Farmers are using their apple crops to feed their pigs and consumers are concerned that the acid in fruit can damage tooth enamel O d. Pear trees have been damaged by a disease and in some parts of the country fires have destroyed apple orchards

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 29CTQ: A city has build a bridge over a river and it decides to charge a toll to everyone who crosses. For...

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Can you think of an industry (or product) with near infinite elasticity of supply in the short term? That is, what is an industry that could increase Qs almost without limit in response to an increase in the price?
The equation for a demand curve is P=2/Q. What is the elasticity of demand as price falls from 5 to 4? What is the elasticity of demand as the price falls from 9 to 8? Would you expect these answers to be the same?
The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
Explain why using the midpoint formula for calculating the elasticity of demand gives the same result whether price increases or decreases, but using the initial price and quantity instead of the average does not.
Suppose you could buy shoes one at a time, miter than in pain. What do you predict the cross-price elasticity for left shoes and right shoes would be?
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A city has build a bridge over a river and it decides to charge a toll to everyone who crosses. For one year, the city charges a variety of different tolls and records information on how many drivers cross the bridge. The city thus gathers information about elasticity of demand. If the city wishes to raise as much revenue as possible from the tolls, where will the city decide to charge a toll: in the inelastic portion of the demand curve, the elastic portion of the demand curve, or the unit elastic portion? Explain.
Would you usually expect elasticity of demand or supply to be higher in the short run or in the long run? Why?
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