Bartleby Sitemap - Textbook Solutions
All Textbook Solutions for Principles of Macroeconomics (MindTap Course List)
1QQ2QQ3QQ1QR2QR3QR4QR5QR6QR7QR8QR9QR10QR1QCMC2QCMC3QCMC4QCMC5QCMC6QCMC1PA2PA3PA4PA5PA6PA7PA8PA9PA10PA11PA12PA1QQ2QQ3QQ1QR2QR3QR4QR5QR6QR7QR8QR9QR10QR1QCMC2QCMC3QCMC4QCMC5QCMC6QCMC1PA2PA3PA4PA5PA6PA1QQ2QQ3QQ1QR2QR3QR4QR5QR6QR1QCMC2QCMC3QCMC4QCMC5QCMC6QCMC1PA2PA3PA4PA5PA6PA7PA8PA9PA1QQ2QQ3QQ4QQ1QR2QR3QR4QR5QR6QR7QR8QR9QR1QCMC2QCMC3QCMC4QCMC5QCMC6QCMC1PA2PAConsider the market for minivans. For each of the events listed here, identify which of the determinants of demand or supply are affected. Also indicate whether demand or supply increases or decreases. Then draw a diagram to show the effect on the price and quantity of minivans. a. People decide to have more children. b. A strike by steelworkers raises steel prices. c. Engineers develop new automated machinery for the production of minivans. d. The price of sports utility vehicles rises. e. A stock market crash lowers peoples wealth.4PA5PA6PA7PA8PA9PA10PA11PADefine the price elasticity of demand. Explain the relationship between total revenue and the price elasticity of demand.Define the price elasticity of supply. Explain why the price elasticity of supply might be different in the long run than in the short run.3QQ1QRList and explain the four determinants of the price elasticity of demand discussed in the chapter.3QR4QRIf demand is elastic, how will an increase in price change total revenue? Explain.What do we call a good with an income elasticity less than zero?How is the price elasticity of supply calculated? Explain what it measures.If a fixed quantity of a good is available, and no more can be made, what is the price elasticity of supply?9QRA life-saving medicine without any close substitutes will tend to have a. a small elasticity of demand. b. a large elasticity of demand. c. a small elasticity of supply. d. a large elasticity of supply.2QCMCA linear, downward-sloping demand curve is a. inelastic b. unit elastic. c. elastic. d. inelastic at some points, and elastic at others.4QCMCAn increase in the supply of a good will decrease the total revenue producers receive if a. the demand curve is inelastic. b. the demand curve is elastic. c. the supply curve is inelastic. d. the supply curve is elastic.6QCMC1PA2PASuppose the price elasticity of demand for heating oil is 0.2 in the short run and 0.7 in the long run. a. If the price of heating oil rises from 1.80 to 2.20 per gallon, what happens to the quantity of heating oil demanded in the short run? In the long run? (Use the midpoint method in your calculations.) b. Why might this elasticity depend on the time horizon?A price change causes the quantity demanded of a good to decrease by 30 percent, while the total revenue of that good increases by 15 percent. Is the demand curve elastic or inelastic? Explain.5PASuppose that your demand schedule for pizza is as follows: Price Quantity Demanded (income = 20,000) Quantity Demanded (income = 24,000) 8 40 pizza 50 pizza 10 32 45 12 24 30 14 16 20 16 8 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of pizza increases from 8 to 10 if (i) your income is 20,000 and (ii) your income is 24,000. b. Calculate your income elasticity of demand as your income increases from 20,000 to 24,000 if (i) the price is 12 and (ii) the price is 16.Maria has decided always to spend one-third of her income on clothing. a. What is her income elasticity of clothing demand? b. What is her price elasticity of clothing demand? c. If Marias tastes change and she decides to spend only one-fourth of her income on clothing, how does her demand curve change? What is her income elasticity and price elasticity now?The New York Times reported (Feb. 17, 1996) that subway ridership declined after a fare increase: There were nearly four million fewer riders in December 1995, the first full month after the price of a token increased 25 cents to 1.50, than in the previous December, a 4.3 percent decline. a. Use these data to estimate the price elasticity of demand for subway rides. b. According to your estimate, what happens to the Transit Authoritys revenue when the fare rises? c. Why might your estimate of the elasticity be unreliable?9PA10PAYou are the curator of a museum. The museum is running short of funds, so you decide to increase revenue. Should you increase or decrease the price of admission? Explain.12PA1QQ2QQ1QR2QR3QR4QR5QR6QR7QR1QCMC2QCMC3QCMC4QCMC5QCMC6QCMC1PA2PA3PA4PA5PA6PA7PA8PA9PA10PA1QQ2QQ3QQ1QR2QR3QR4QR5QR1QCMC2QCMC3QCMC4QCMC5QCMC6QCMC1PA2PA3PA4PA5PA6PA7PA8PA9PAA friend of yours is considering two cell phone service providers. Provider A charges 120 per month for the service regardless of the number of phone calls made. Provider B does not have a fixed service fee but instead charges 1 per minute for calls. Your friends monthly demand for minutes of calling is given by the equation QD = 150 50P, where P is the price of a minute. a. With each provider, what is the cost to your friend of an extra minute on the phone? b. In light of your answer to (a), how many minutes with each provider would your friend talk on the phone? c. How much would she end up paying each provider every month? d. How much consumer surplus would she obtain with each provider? (Hint: Graph the demand curve and recall the formula for the area of a triangle.) e. Which provider would you recommend that your friend choose? Why?11PA1QQThe demand for beer is more elastic than the demand for milk. Would a tax on beer or a tax on milk have a larger deadweight loss? Why?3QQ1QR2QR3QRWhy do experts disagree about whether labor taxes have small or large deadweight losses?What happens to the deadweight loss and tax revenue when a tax is increased?1QCMC2QCMC3QCMC4QCMC5QCMC6QCMC1PA2PA3PA4PA5PA6PA7PA8PA9PA10PA1QQ2QQ3QQ1QR2QR3QR4QR5QR6QR1QCMC2QCMC3QCMC4QCMC5QCMC6QCMC1PA2PA3PA4PA5PA6PA7PA8PA9PA10PA11PA1QQ2QQ3QQ4QQ5QQ1QCMC1QR2QR3QR4QR5QR6QR7QR8QR2QCMC3QCMC4QCMC5QCMC6QCMC1PA2PA3PA4PA5PA6PA8PA9PA10PA11PA1QQ2QQ1QR2QR3QR4QR5QR1QCMC2QCMC3QCMC4QCMC5QCMC6QCMC1PA2PA3PA4PA5PA6PA7PA8PA9PA1QQ2QQ3QQ1QRList and describe four determinants of productivity.3QR4QR5QR6QR