1. The price of sugar (a substitute for corn syrup) decreased. At the same time, the price of corn starch (one of the main ingredients of corn syrup) increased. These two effects together will lead to the following change in the price and quantity of corn syrup:

1. An increase in quantity and an ambiguous effect on price
2. An increase in both price and quantity
3. An increase in price and an ambiguous effect on quantity
4. A decrease in quantity and an ambiguous effect on price
5. A decrease in price and an increase in quantity

2. Universal is an amusement park company using geographical segment pricing to increase profits. It charges different prices for its park entrance tickets in different countries. Marginal costs are identical in the two countries. After investigating the demand in country A and in country B, Universal decided to charge a higher price in country B. Which of the following statements is consistent with this decision?

1. There are many similar amusement parks in country B, whereas there is only little competition in country A
2. Consumers in country A have a more elastic demand for amusement parks than consumers in country B
3. None of the other answers
4. Universal has lower fixed costs in country B as compared to country A
5. Consultants concluded that the demand for amusement parks is more elastic in country B than in country A

3. Firms X and firm Y are maximizing profits. At their respective profit-maximizing price, Firm X's own-price elasticity is -2 and Firm Y's own-price elasticity is -3. Which statement is correct?

1. Firm X is a price taker
2. The share of markup in the optimal price (Lerner Index) for firm X is equal to 50%
3. Everything else held constant, if firm Y increases its price it will lead to an increase in its revenue
4. Firm X's consumers are more price sensitive than firm Y's consumers
5. Firm Y can charge a higher markup than firm X

4. Everyonefood is a new grocery delivery service that is attempting to lure consumers from more established services such as Instacart. Which of the following shouldnotbe a consideration for Everyonefood when it is setting its prices?

1. The costs of providing urgent customer service support, which depend on the number of customers served
2. The fixed costs of developing the Everyonefood app
3. The own-price elasticity of demand for their delivery services
4. Whether there are switching costs between Everyonefood and Instacart
5. The cross-price elasticity of demand between Instacart and Everyonefood