EBK EXPLORING MACROECONOMICS
7th Edition
ISBN: 9780100546400
Author: Sexton
Publisher: YUZU
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Question
Chapter 6, Problem 16P
To determine
The effect of tax burden on consumers and producers if demand for food is inelastic, supply for food is elastic, demand for basketball games is elastic and supply for basketball games is inelastic.
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You were gifted a box of 50 thermos bottles that you do not need and you plan to sell them on Ebay. You were initially thinking of asking for $20 per bottle, but then you found out that demand is elastic at $20.
Should you lower your asking price?
Yes, because when demand is elastic, a lower price increases revenue.
Yes, because when demand is inelastic, a lower price increases revenue.
No, because when demand is inelastic, a lower price increases revenue.
No, because when demand is elastic, a higher price increases revenue.
A city government decides to tax hotel
rooms to raise money. Before the tax,
1000 rooms were typically rented out per
month. After the tax, the number of
rooms rented per month falls to 900, the
amount paid by hotel guests rises to $130
and the amount received by sellers falls
to $110 per room. If the price per hotel
room was $100 per night before the tax,
which of the following can we conclude?
The supply of hotel rooms is more price
elastic than is the demand
The demand for hotel rooms is more
price elastic than is the supply
The supply of hotel rooms after the tax is
greater than the demand for hotel rooms
The demand for hotel rooms after the tax
is greater than the supply of hotel rooms
We cannot conclude any of the options
given with only the information provided.
Your company receives 40 excess copies of a book. You plan to sell these books in two markets: directly in the store or sell them on ebay. Here are the two demand equations: Store Demand: P_S = 200 – 2Q_S PS=200–2QS Ebay Demand: P_E = 250 – 5Q_E PE=250–5QE If your goal is to maximize total revenue, how many books will you sell on ebay?
Chapter 6 Solutions
EBK EXPLORING MACROECONOMICS
Ch. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Explain why using the midpoint formula for...Ch. 6 - Prob. 7PCh. 6 - If the elasticity of demand for hamburgers equals...Ch. 6 - Evaluate the following statement: Along a...Ch. 6 - If the midpoint on a straight-line demand curve is...
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