Question

QUESTION 36 The price elasticity of demand for Alpha personal computer is estimated to be -2.0. If the price of the computers decreases by 5%, what would be the expected percentage changes in the quantity demanded and in the total revenue for the company? a) Quantity demanded would decrease by 10% and total revenue would decreases by 5%. b) Quantity demanded would increase by 10% and total revenue would increases by 5%. c) Quantity demanded would decrease by 10% and total revenue would decreases by 10%. d) Quantity demanded would increase by 10% and total revenue would increases by 10%.

QUESTION 37 If the income elasticity of demand for good X is -0.5, and the people’s disposable income decreases by 10%, then a) X is a normal good and the demand for X will increase by 5%. b) X is a normal good and the demand for X will decrease by 5%. c) X is an inferior good and the demand for X will increase by 5%. d) X is an inferior good and the demand for X will decrease by 5%.

QUESTION 38 If two goods have a cross price elasticity of demand of -1.2, and the price of one good decreases by 10%, then: a) the two goods are substitutes and the demand for the other good will increase by 12%. b) the two goods are substitutes and the demand for the other good will decrease by 12%. c) the two goods are complements and the demand for other good will increase by 12%. d) the two goods are complements and the demand for other good will decrease by 12%.

QUESTION 39 Brand X computer manufacturer is selling 2000 computer printers per month, and Brand Y computer has just increased the price of its computer from $300 to $500. If the arc cross price elasticity of demand for X’s printer relative to computer Y’s prices is -1.0, what will be X’s new quantity sold? a) 500 printers b) 1200 printers c) 2000 printers d) 3000 printers

Answer #1

The increase in the price of one good by 10% decreases the quantity demanded of the other good by 12%. Then goods are substitutes.

Therefore, the correct option is:
**(d)**

**=============================================================================**

**39.**

The cross-price elasticity is -1. A 1% increase in the price of one computer will lead to a 1% decrease in quantity demanded of others. The percentage change in the price of Y is

Then the correct option is:
**(b)**

1) The income elasticity of demand for Good Z is –0.2, while the
cross-price elasticity of demand between Good Z and Good Y is 1.63.
Which of the following statements is correct regarding Good Z?
Group of answer choices
Good Z is a inferior good, and Goods Z and Y are
complements.
Good Z is an inferior good, and Goods Z and Y are
substitutes.
Good Z is a normal good, and Goods Z and Y are complements.
Good Z...

40) The cross elasticity of demand for butter and margarine is
likely to be A) positive because they are substitutes.
B) positive because they are complements.
C) negative because they are substitutes.
D) negative because they are complements.
E) positive because they are normal goods.
41) If an increase in the price of green ketchup increases the
demand for red ketchup, then
A) red and green ketchup are substitutes.
B) red and green ketchup are normal goods.
C) the cross...

1-As we move up the demand curve, the price elasticity of demand
* A) increases B) decreases C) becomes unitary D) does not
change
2-If the price of lemonade increases relative to the price of
grape juice, the demand for: * A) grape juice will decrease. B)
grape juice will increase. C) lemonade will decrease. D) lemonade
will increase.
3-An increase in price will result in no change in total revenue
if: * A) the percentage change in price is...

Determine the price elasticity of demand, the cross-price
elasticity of demand or the income elasticity in the following
scenarios.
a. Consider the market for coffee. Suppose the price rises from
$4 to $6 and quantity demanded falls from 120 to 80. What is price
elasticity of demand? Is coffee elastic or inelastic?
b. John’s income rises from $20,000 to $22,000 and the quantity
of hamburger he buys each week falls from 2 pounds to 1 pound. What
is his income...

3a)At the farmer's market, Jan sells bags of apples. When she
decreases the price, she attracts more customers. What can we
conclude?
Demand is elastic and Jan's revenue will increase.
We have insufficient information to make any statements about
elasticity.
Demand is inelastic
Demand is elastic
b).
If the cross-elasticity of demand for Good Q with respect to
Good Z is -1.9, then the goods are
complements
normal goods
substitutes
inferior goods
c).Assume that the demand for unskilled workers is...

The cross elasticity of demand for good A and good B is
minus−0.7.
This means that
A.
if the price of good A increases by 10 percent, the quantity
demanded of good B decreases by 7 percent.
B.
the goods are substitutes.
C.
if the price of good A increases by 10 percent, the quantity
demanded of good B increases by 7 percent.
D.
the goods are complements.
E.
both A and D are correct.

If the price of good X decreases by 2.1% and the price
elasticity of demand is 0.4, find the percentage change in quantity
demanded and the percentage change in revenue. If you want to
increase revenue should you increase or decrease the price in this
case?

If the cross-price elasticity of demand between two goods is
-0.5, two goods are __________. If the income elasticity of a good
is -2, that good is a ___________.
Substitutes: Normal good
Complements: Inferior
Complements: Necessity
Substitutes: Luxury

A measure of the rate of percentage change of quantity demanded
with respect to price, holding all other determinants of demand
constant is
a.
Income elasticity of demand
b.
Own price elasticity of demand
c.
Price elasticity of market equilibrium
d.
Cross price elasticity of demand
The value of the income elasticity of demand coefficient for
Good X is given as 0.1. This means that
a.
as income increases by 10 percent, quantity demanded rises by 1
percent.
b.
as income...

1) Using the midpoint method, the price elasticity of demand is
determined to be about 0.85. If there is a 10% decrease in the
quantity demanded of the product then what effect would this have
on the price of the product?
A decrease in the price of the product from $8.50 to $10
A 11.8% increase in the price of the product
An increase in the price of the product from $8.50 to $10
2)The ________ is negative for complementary...

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