ECO 365T Wk 3 - Apply Summative Assessment Quiz

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ECO 365T Wk 3 - Apply Summative Assessment Quiz

Suppose that as the price of Y falls from $12 to $10, the quantity of Y demanded increases from 500 to 600. Then the absolute value of the price elasticity (using the midpoint formula) is approximately

Multiple Choice

Answer the question based on the following data.

Price Per UnitQuantity Demanded Per Unit of Time

$ 2012

18    17

16    20

14    24

12    30

10    36

8     40

6     44

4     48

What is the price elasticity of demand over the range of $4 to $6?

Multiple Choice

Alex, Kara, and Susie are the only three people in a community. Alex is willing to pay $20 for the fifth unit of a public good; Kara, $15; and Susie, $25. Government should produce the fifth unit of the public good if the marginal cost is less than or equal to

Multiple Choice

•      $60.
•      $20.
•      $15.
•      $45.
•      $25.

Answer the question based on the following information for a public good. Pa and Pb are the prices that individuals A and B are willing to pay for the last unit of a public good, rather than do without it. These people are the only two members of society.

Q     Pa    Pb

1     $ 3   $ 5

2     2     4

3     1     3

4     0     2

5     0     1

The collective willingness of this society to pay for the second unit of this public good is

Multiple Choice

•      $6.
•      $2.
•      $1.
•      $8.
•      $4.

If a firm finds that it can sell $32,000 worth of a product when its price is $8 per unit and $35,000 worth of it when its price is $10, then

Multiple Choice

the demand for the product is inelastic in the $10-$8 price range.

the demand for the product must have increased.

elasticity of demand is 1.67.

the demand for the product is elastic in the $10-$8 price range.

Suppose the price elasticity of supply for crude oil is 1.5. How much would price have to rise to increase production by 9 percent?

Multiple Choice

6 percent

9 percent

15 percent

The price of season tickets to a performing arts theater decreases by 4 percent. As a result, the quantity demanded increases by 10 percent. The price elasticity of demand for season tickets is

Multiple Choice

If the price elasticity of demand for a product is equal to 2.0, then a decrease in price of 4 percent will increase quantity demanded by

Multiple Choice

2 percent.

8 percent.

Suppose that the price of peanuts falls from $4 to $3 per bushel and that, as a result, the total revenue received by peanut farmers changes from $20 to $17 billion. Thus,

Multiple Choice

the demand for peanuts is elastic.

the demand for peanuts is inelastic.

the demand curve for peanuts has shifted to the left.

no inference can be made as to the elasticity of demand for peanuts.

 Refer to the diagram and assume a single good. If the price of the good decreased from $6.30 to $5.70 along D1, the price elasticity of demand along this portion of the demand curve would be

Multiple Choice