1.Suppose you learn that the demand elasticity for your firm's good is -5. How can you increase total revenue?

Not enough information to determine.

You can increase total revenue by raising price.

You can increase total revenue by lowering price.

You are already charging a price that maximizes total revenue.

2.Which of the following goods should we expect to be most inelastic?

A good with no substitutes that most people consider to be a necessity.

A good with some substitutes that most people consider to be a luxury.

A good with no substitutes that most people consider to be a luxury.

A good with some substitutes that most people consider to be a necessity.

3.Assume that a 4 per barrel tax on oil causes a loss of 43 billion in consumer and producer surplus and creates a deadweight loss of 10 billion. From this information, we know the tax revenue from the tax is

33

4

53

10

4.Is the following schedule of prices and quantities more likely to be a supply schedule or a demand schedule? (You may assume that the market being described obeys the laws of supply and demand.)