Question

- The demand equation for widgets is P=20-2QD, where P is the
price of cookies in dollars and QD is the quantity demanded.
Calculate the price elasticity of demand for cookies between
QD
_{1}=2 and QD_{2}=3.

- Scalpers sell their tickets outside of theatres, sporting events and concerts. Demand for scalper tickets is usually quite high for sold-out events, as consumers have no other alternative if they want to purchase tickets.

Using demand and supply curves, show the change in equilibrium price and quantity for the following scenarios. Hint: Consider the elasticity of demand.

- What happens to demand for scalper tickets as the start of the sold-out event nears?

- What happens to demand for scalper tickets at an event that is not sold out, and has a small walk-up crowd.

- Which of the following statements is true concerning comparative advantage? Explain your rational

- Canada is relatively more efficient at producing lard
- Canada is relatively more efficient at producing machetes
- Zimbabwe is relatively more efficient at producing lard
- Both b) and c) are correct

Answer #1

1. The demand equation for widgets is- P= 20-2Qd

When quantity is Qd1=2, price, P1= 20-2*2= 20-4=16

So, when Qd1= 2, P1=16

When quantity is Qd2=3, then price, P2= 20-2*3=20-6=14

So, when Qd2=3, P2=14

Now, we have two points on the demand curve, (Qd1,P2)=(2,16)& (Qd2,P2)=(3,14)

Price elasticity of demand= Percentage change in quantity demanded/Percentage change in price = = = ==

1. The following data is from the demand for chocolate cookies:
Producer reduces the price of some cookies from 12 to 10 cents. Find out that the quantities sold increased from 210 to 250 units:
a) Calculate the price elasticity of cookies.
b) Present the graph; Indicate if it is Price Elasticity of Demand or Supply.
c) if it is elastic, inelastic or unitary.
d) If the price elasticity coefficient in varieties is (- 3.0). What happens if I lower...

1. The following data is from the demand for chocolate cookies:
Producer reduces the price of some cookies from 12 to 10 cents. Find out that the quantities sold increased from 210 to 250 units:
a) Calculate the price elasticity of cookies.
b) Present the graph; Indicate if it is Price Elasticity of Demand or Supply.
c) if it is elastic, inelastic or unitary.
d) If the price elasticity coefficient in varieties is (- 3.0). What happens if I lower...

1. Suppose the market demand for Paradise Bakery's cookies is
given by the equation P=45-(1/2)Q. What quantity sold would
maximize the revenue from the cookies?
1-) 40
2- )45
3-) 50
4-) 55
5-) None of these are correct.
2. A monopolist enjoys a monopoly over the right to sell
automobiles on a certain island. It imports automobiles from abroad
at a cost of $10,000 each and sells them at the price that
maximizes profits. One day, the island’s government...

The table below list the different combinations of cakes and
cookies that can be produced with a fixed quantity of
resources
Cake
Cookies
A
0
10
B
1
9
C
2
7
D
3
4
E
4
0
Plot the production possibilities frontier
Show a point X that is both feasible and efficient
At production level C, what is the opportunity cost of
producing one more cake?
What is the opportunity cost of moving production from E to
C?
Does...

1.) True or False? For all societies, resources are scarce, and
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2.) (1 point) Adam Smith’s “invisible hand” refers to a.) the
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2. A demand curve indicate
a. the maximum willingness to pay for a given quantity
b.the consumer's gain from exchange
c.the market price of a good or service
d. the equilibrum quantity
3. trade permitts countries to
a. consume more than they capable of producing
b.produce based on their comparative advantage
c.specialize more fully
d.all of above
4. which of the following dose not impact how elastic supply
is?
a. whether the supply is local or global
b.the share of...

1.
Which is statement is true?
I. A single-price monopolist charges a price equal to the marginal
cost of the last unit sold.
II. A monopolist with positive marginal costs and facing a linear
demand curve always sets a quantity (or price) such that it sells
on the elastic section of the demand curve.
III. A monopolist regulated by marginal-cost pricing regulation
sells at a price that covers its variable and fixed costs of
production, but it still causes a...

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