Question

Consider the market demand curve for apples, which relates the
quantity demanded of apples (in

thousands of bushels) to various prices of apples. Suppose
that the price elasticity of demand for apples is -2.

If the price of apples increases by 3 percent, then by how
much will the quantity demanded of apples

decrease?

Select one:

a. by 2 percent

b. by 6 percent

c. by 6 thousand bushels

d. by 2 thousand bushels

Answer #1

Answer ) Option b is the correct answer.

Given-

1) Price elasticity of demand for apples -2

2) The percentage change in price is 3%

We have to calculate the percentage change in quantity demanded.

Price elasticity is defined as ratio of percentage change in the quantity demanded to percentage change in price . Thus

Price elasticity (e) = %change in QD/%change in price.

Since %change in QD is not given we will assume it x and will calculate the value-

Putting the values in the formula

-2 = x/0.03

x = 0.03*-2

x =0.06

x=6%

Thus percentage change in quantity demanded is 6%.

37)
Price per Constant-
Quality of X
Quantity of
X Demanded
per Time Period
Quantity of
X Supplied
per Time Period
$10
0
150
8
20
120
6
40
90
4
60
60
2
80
30
0
100
0
Based on the table above, if other influences remain constant and
the market is free to adjust, a stable equilibrium price will be
established at
Select one:
a. $4.
b. $6.
c. $8.
d. $2.
A shortage will occur when
Select...

12) When quantity supplied equals quantity demanded:
Multiple Choice
a)the market forces push the economy to produce more.
b)equilibrium is reached.
c)the market forces push the economy to produce less.
d)the market forces cease to function.
13)Consider a market that is in equilibrium. If it experiences
both an increase in demand and an increase in supply, what can be
said of the new equilibrium? The equilibrium:
Multiple Choice
a)quantity will definitely rise, while the equilibrium price
cannot be predicted.
b)price...

A perfectly inelastic demand curve indicates that
a.
price has no effect on the quantity demanded.
b.
for a given percent change in price, the quantity demanded rises
by the same percentage.
c.
the percent change in price is less than the percent change in
quantity demanded.
d.
a producer can sell as many units as desired at the market price
but no units above the market price.

14 If the slope of the demand curve is –2, price is $5 and
quantity demanded is 10 units, then the price elasticity of demand
is:

Suppose the price of apples increases from $20 to $28, and in
response quantity demanded decreases from 100 to 84. Using the
mid-point formula, what is the price elasticity of demand? (Note:
your answer should be correct to two decimal places; and be sure to
express your answer as a positive number.)

Suppose the market demand curve for a product is given by
QD=100-5P and the market supply curve is given by
QS=5P
a. What are the equilibrium price and quantity?
b. At the market equilibrium, what is the price elasticity of
demand?
Suppose government sets the price at $15 to benefit the
producers.
What is the quantity demanded?
What is the quantity supplied?
What is the amount of the surplus?
Suppose market demand increases to Qd=200-5P.
What is the new equilibrium...

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...

26. If the income elasticity of demand is -0.80 and the quantity
demanded increases by 10 percent as a result of a change in income,
income must be
a. increased by 8 percent
b. increased by 80 percent
c. decreased by 8 percent.
d. decreased by 12.5 percent.
27. When the demand is unitary
a. The marginal income is zero.
b. the percentage change in the amount is equal to the percentage
change in the price.
c. An increase in...

On a graph of a demand curve, total consumer surplus
equals:
A-the demand curve.
B-the area above the demand curve and beneath the market
price.
C-the market price.
D-the area beneath the demand curve and above the market price.
Total producer surplus equals:
A-the area above the supply curve and beneath the market
price.
B-the area beneath the supply curve and above the demand
curve.
C-the market price.
D-the supply curve.
An increase in supply refers to:
...

Assume that the demand
curve D(p) given below is the market demand for apples:
Q=D(p)=320−12pQ=D(p)=320-12p, p
> 0
Let the market supply
of apples be given by:
Q=S(p)=60+15pQ=S(p)=60+15p,
p > 0
where p is the price
(in dollars) and Q is the quantity. The functions D(p) and S(p)
give the number of bushels demanded and supplied.
What is the
consumer surplus at the equilibrium price and
quantity?
Round the equilibrium
price to the nearest cent, use that rounded price to...

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