Question

1) What changes Quantity demand and Quantity supply?

2) What determines elasticity?

3) What makes elasticity elastic or inelastic?

4) Explain how government use of subsidies can be counterproductive. Give 3 examples. Keep the answer to the question short.

5) Explain how government use of taxes can be counterproductive. Give 3 examples. Keep the answer to the question short.

Answer #1

1. Changes in quantity demand and quantity supply happens when there is a change in the price and other things remains constant. With a changes in the price the quanitity demand and quantity supply changes. This is also called as contraction and expansion of demand. Price changes quantity demand and quantity supply.

2 Determinants of elasticity of demand

a. Nature of the commodity

b. Substitutes of the commodity,

c. price level of the product,

d. Income level of the consumer and

e. Distribution of Income in society.

3. Elasticity is elastic if there is a change in the quantity change with a change in the price. If the percentage change in the quantity demanded is more than the percentage change in the price then it is elastic.

If the percentage change in the qunatity demanded is less than the percentage change in the price, elasticity will be inelastic.

1) Explain how government use of subsidies can be
counterproductive, give 3 examples.
2) Explain how government use of taxes to decrease consumption
can be counterproductive. Give 3 examples.

1. If the price elasticity of demand for tomatoes is -1.25 and
quantity changes by 3% due to this large crop, how much will
quantity demanded change? Show your work for the possibility of
partial credit.
2. An industry in which one firm can supply the entire market at
a lower price than two or more firms can is called a
a. legal monopoly
b. single-price monopoly
c. natural monopoly
d. price-discriminating monopoly
3. Suppose excellent weather leads to a...

What is price elasticity of demand?
What determines whether a product’s demand is elastic, inelastic,
unitary elastic, perfectly elastic and perfectly inelastic? What is
mid-point formula to determine the elasticity of demand and why is
it important to use it instead of the general formula for
elasticity? Carefully explain.

1. The price elasticity of demand for iphone 6 is 1.2. Apple
wants to increase its total revenue. Would you recommend that Apple
raise or lower the price of iphone 6? Explain your answer.
2. The demand of gasoline is more inelastic in the short run
than in the long run. Why? Give examples that illustrate why the
demand of gasoline in the long run is not inelastic.
3. Choose one of the products or services that your company
provides,...

Carefully explain (using diagrams) why is the point of
intersection between supply and demand for a product point of
equilibrium price and quantity and no other point. What happens if
price is above or below the point of equilibrium and how is the
equilibrium price and quantity restored?
What is price elasticity of demand?
What determines whether a product’s demand is elastic, inelastic,
unitary elastic, perfectly elastic and perfectly inelastic? What is
mid-point formula to determine the elasticity of demand...

1. Examine the effects of government policies in the light of
the demand supply framework.
2. Explain the meaning of the elasticity of demand and supply
and apply the concept of elasticity to real-world problems.
3. Describe the concepts of consumer surplus and producer
surplus and apply the concepts to study the efficiency of the
market and the inefficiency of government taxation.
4. Define price floor and price ceiling in economics.
5. Use the model of demand and supply to...

What is perfectly elastic demand/supply? Draw a graph to
represent perfectly elastic demand/supply.
What is perfectly inelastic demand/supply? Draw a graph to
represent perfectly elastic demand/supply.
When the price of t-shirts increases by 12 percent, the quantity
of t-shirts demanded falls by 20 percent. Calculate the price
elasticity of demand. Is the demand for t-shirts elastic,
inelastic, or unit elastic?
When the price of t-shirts falls by 30 percent, the quantity of
t-shirts supplied decreases by 20 percent. Calculate the...

For each of the following assume that the supply curve shifts
while the demand curve remains constant. What is the direction of
the supply shift and relative elasticity of demand?
1.) Price falls significantly. Quantity hardly changes at
all.
Demand is ____
a.) perfectly elastic
b.)highly inelastic
c.)highly elastic
2.) Prices do not change. Quantity decreases significantly.
Demand is _________
a.) highly elastic
b.) perfectly elastic
c.) highly inelastic
Can anyone help?

Talk about price elasticity of demand, and how it is different
from income elasticity. Propose and calculate a numerical example
for each. Also describe price elasticity of supply and use its
formula to numerically calculate an example. In each case, make
sure to identify whether the outcome is elastic/inelastic/unit
elastic, and what the sign of the outcome implies. SHORT ANSWER
PLEASE!

An equiproportionate change in both price and quantity demanded
is termed :
a
Perfectly elastic demand
b
Unit price elasticity of demand
c
Perfectly inelastic demand
d
Perfectly inelastic supply
Question 11 (1 point)
The Giffen Paradox is the ony exception to the law of
demand.
True
False
Question 12 (1 point)
The point-elasticity method of calculating own-price elasticity
of demand is based on:
a
Infinitesimally small changes of differential calculus.
b
Linear approximation
c
Non-linear approximation
d
A method...

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