Question 2 Match each option on the left column to the best possible option from the right column An increase in supply means a Income elasticity is negative for a Total revenue is If Pepsi becomes cheaper, then the demand curve for Coca-Cola will Any point lying inside the boundary of the production possibilities frontier is A. Inferior good B. inefficient C. Shift to the right D. movement to the right on the supply curve E. rightward shift of the supply curve F. shift to the left G.Price x Quantity H. efficient
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- How does one analyze a market where both demand and supply shift?What does a downward-sloping demand curve mean about how buyers in a market will react to a higher price?Would you expect supply to play a more significant role in determining the price of a basic necessity like food or a luxury like perfume? Explain. Hint: Think about how the price elasticity of demand will differ between necessities and luxuries.
- Why is the demand curve with constant unitary elasticity concave?As a general rule, is it safe to assume that a change in the price of a good will always have its most significant impact on the quantity demanded of that good, rather than on the quantity demanded of miller goods? Explain.The rules of politics are not always the same as the rules of economics. In discussions of setting budgets for government agencies, there is a strategy called closing the Washington Monument. When an agency faces the unwelcome prospect of a budget cut, it may decide to close a high-visibility attraction enjoyed by many people (like the Washington Monument). Explain in terms of diminishing marginal utility why the Washington Monument strategy is So misleading. Hint: If you are really trying to make the best of a budget cut, should you cut the items in your budget with tile highest marginal utility or line lowest marginal utility? Does the Washington Monument strategy cut the items with the highest marginal utility or line lowest marginal utility?
- If the local electr icity ulilily wanls loraiserevenues. il should ils price because demand for clectricity is likcly to be Iower; inelastic ralse; elastic raise; pertectly inelastir raise; inelastic9. Application: Elasticity and hotel rooms The Inlinwing graph input tool shows the daily demand for hotel moms at the Oceans Hotel and Casino in Atlantic City, New Jersey. To help the hotel management better understand the market, an woonomist identified three primary factors that affect the demand for me ach night. The demand factum, lung with the values corresponding to the initial demand curve, are shown in the following table and alungside the graph input tool. Demand Factor Average American household income Roundtrip airfare from New Orleans (MSY) to Atlantic City (ACY) Room ratu at the Meadows Hotel and Casino, which is near the Ocean Use the graph input tool to help you answer the following questions. You wil not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Show Transcribed Text 600 450 ****** 100 0 Demand ++ 55155 366 350 351 350 100 ans…opbox Format Tools Add-ons Help Last edit was seconds ago BIUA 三三三三 1三ニ Normal text Calibri 11 1. 3 4 6 I 7r Demand Shifters: 5-14 The Demand for Beef. For each scenario draw a general demand curve and label it D. Then shift the curve to the left or the right depending on what will happen to the demand for beef. Draw an arrow showing direction and label your new curve D1. Then tell me the determinant of demand that shifted the curve. For example, consumer income increases or population decreases. Hint: There is one that is a change in quantity demanded and the curve will not shift, there will just be movement along the curve. 5. Millions of immigrants swell to U.S. population 6. Pork prices drop 7. Surgeon general warns that eating beef can be hazardous to health prd 8. Take home pay for Americans drops 3 month in a row 2.
- |Unit 3 Midterm Economics A docs.google.com/forms/d/e/1FAlpQLSfDzcagnpq9EUKBs3AWMb. a change in quantity demanded for one product or service causes a change in simple demand for a related product or service. * In 2. O Elasticity of Demand O Cross Elasticity of Demand O Diminishing Marginal Utility O Cost-Benefit Analysis O All of These O None of These The rules of the price system operate in all markets of a capitalist/market economy. The market where consumers earn income Market. by selling resources to business resources is called O ConsumerCreative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned, however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(1) the concept of elasticity of demand, (2) why raisingprices without understanding the elasticity would bea bad move, (3) your recommendations for measurement, and (4) the potential impact on profits for elasticand inelastic demandCreative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned. however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(I) the concept of elasticity of demand, (2) why raisingprices without undetstanding the elasticity would bea bad move. (3) your recommendations for measurement. and (4) the potential impact on profits for elasticand inelastic demand