Question

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.

Answer #1

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...

2. Suppose supply is perfectly inelastic and demand is
relatively elastic. Who bear all the tax burden, buyers or sellers?
Explain in details.
3. Suppose demand for electricity is inelastic, but not
perfectly. A sales tax is imposed, and the tax is levied on buyers.
Draw a graph to show the effects of the tax. Indicate CS, PS, tax
revenue and DWL after tax on your graph.

When the price is
$66
a unit, demand is perfectly elastic. Draw the demand curve for
this good. Label it
D1.
When the quantity demanded is
99
million units a year, demand is perfectly inelastic.
Draw the demand curve for this good. Label it
D2.
When the price is
$1212
a unit, the quantity demanded is
33
million units a year, and demand is unit elastic.
Draw the demand curve for this good. Label it
D3.

monopolist will produce where
demand is elastic.
demand is perfectly elastic.
demand is inelastic.
demand is perfectly inelastic.

Draw and label a graph depicting world trade in which the world
price is perfectly elastic and lower than the country price.
Start with a graph depicting market equilibrium with the demand
curve and supply curves having slopes of approximately 1 (negative
1 for demand).
Modify the graph to demonstrate the world market price being
lower than the country market price.

Consider a market with a perfectly
elastic demand curve at p∗ =
1,763 and a perfectly inelastic supply curve at
q∗ = 452. What is the Consumer Surplus? What is
the Producer Surplus?

Consider a market with a perfectly elastic demand curve at p∗ =
1,763 and a perfectly inelastic supply curve at q∗ = 452. What is
the Consumer Surplus? What is the Producer Surplus? (15%)

4.
If Supply and Demand have the normal shapes (not perfectly
elastic or inelastic), a "tax on sellers" (as defined by Mankiw)
will shift demand upward by less than the amount of the tax, and
equlibrium posted price will increase by the same amound as the
tax.
True or False?
6.
If Supply and Demand have the normal shapes (not perfectly
elastic or inelastic), a "tax on sellers" (as defined by Mankiw)
will shift demand upward by the amount of...

Tax burdens are higher on consumers when:
supply and demand are elastic.
demand is elastic and supply is inelastic.
demand is inelastic and supply is elastic.
demand and supply are inelastic.

67. Suppose demand for electricity is inelastic, but not
perfectly. A sales tax is imposed, and the tax is levied on buyers.
Draw a graph to show the effects of the tax. Indicate CS, PS, tax
revenue and DWL after tax on your graph.
68. Suppose supply is perfectly inelastic and demand is
relatively elastic. Who bear all the tax burden, buyers or sellers?
Explain in details.

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