Question

A. Suppose the price elasticity of the supply of ventilators is 0.1 and there is a 20% increase in price. What is the supply response?

2% increase. 2% decrease. 20% increase. 20% decrease.

B. Why did the US impose VERs on Japan in the 1980s?

To save the US auto industry. To save the US steel industry. To save the US farm industry. To save the US jet airplane industry.

Answer #1

1. Suppose the U.S. equilibrium price of beef is $2 per kilo and
Japan equilibrium price of beef is $4 per kilo; international
equilibrium would be established by
A. The intersection of U.S. excess supply and Japan excess
demand of beef.
B. The intersection of Japan excess supply and U.S. excess
demand of beef.
C. The intersection of U.S. and Japan excess supply of beef.
D. The intersection of U.S. and Japan excess demand of beef.
2. Other things being...

Suppose the price elasticity of demand for oil is 0.1. In order
to lower the price of oil by 20 percent, the quantity of oil
supplied must be increased by
Select one:
a. 200 percent.
b. 20 percent.
c. 0.2 percent.
d. 2 percent.

The price elasticity of physician office visits is -0.1. If
price decreases by 10%, TOTAL EXPENDITURES on outpatient visits
will:
a. increase by 0.1% b. increase by 10% c. decrease by 10% d.
decrease by 0.1% e. No change in expenditures.

Suppose in the U.S. natural gas market, estimated price
elasticity of demand is 0.05, estimated price elasticity of supply
is 0.1, the equilibrium price is $50 per mcf (thousand cubic feet),
equilibrium quantity is 20 tcf (trillion cubic feet)
a. Find demand and supply functions for natural gas?
b. suppose the discovery of natural gas field increases supply
by 2 tcf at all price levels. Calculate the effect of this increase
in production on equilibrium price of natural gas.

Can you think of an industry (or product) with near infinite
elasticity of supply in the short term? That is, what is an
industry that could increase Qs almost without limit in response to
an increase in the price? 2

Suppose that the price elasticity of demand for bus trips is
equivalent to │ED│ = 0.5. While the income elasticity of demand for
bus trips is equal to EI = - 0.1 and the cross elasticity of demand
for bus trips with respect to the price of gasoline is E Bus,
Gasoline = - 0.2.
to. Would an increase in the price of the bus ticket increase or
decrease the revenue of the bus company?
b. If the price of...

1. Suppose the price elasticity of demand for shampoo is 1.8. If
the price of shampoo increases by 20%, what would we expect to
happen to the quantity of shampoo demanded?
Increase by 9%
Increase by 36%
Decrease by 9%
Decrease by 13%
Decrease by 36%
2. Suppose we know that the income elasticity of demand for
fast-food meals is -0.5. If a household’s income increased by 100%,
the number of fast-food meals they consume will decrease by 200%.
True...

Suppose the demand and supply curves for a large specialty
pizza are given by:
Qd = 120 – 10P
Qs = -30 + 5P.
Using the demand and supply functions above, the equilibrium
price of a pizza is ____, and the equilibrium quantity is ____.
Illustrate your answer.
Compute Price elasticity of demand and supply at this
equilibrium.
Compute CS and PS and illustrate on a graph.
Suppose that the government decrees that a specialty cannot be
sold above $8....

Part 2:
For each of the following,
(a) calculate the elasticity,
(b) interpret your result (in terms of whether a good is
elastic/inelastic, and what the percentage change in quantity will
be in response to a 1% change in price), and
(c) indicate what would happen to revenues for this good if the
price was increased
In response to a 10% increase in price, the quantity demanded
of Bubly decreased by 20%
In response to a 5% decrease in price,...

if
the price elasticity of demand ed is equal to 2 then a 20% increase
in quantity demanded would result in a
A. None of the above
B. 10% decrease in price
C. 10% increase in price
D. 40% increase in price
E. 20% decrease in price

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