8 QUESTION 7. Part A. "About one billion marbles are made in the U.S. every year, mostly in central Illinois and West Virginia, where the needed silica sand, soda ash and natural gas used to heat the glass to make marbles are abundant. Marbles that used to cost a penny in the 1930s and 1940s now sell from 10 cents to 50 cents apiece unless they are rare and can cost a lot more. 'One reason for the rise in the price is the huge amount of energy needed to make marbles.' To make marbles, glass must be superheated in a vat, then cut into uniform pieces which are rolled into spheres by steel or cast-iron cylindrical screws rotating in opposite directions. Annealing or curing takes about 24 hours." A 1. "Silica sand, soda ash and natural gas" used in making marbles are examples of A 2. TRUE or FALSE. The rise in costs of energy needed to make marbles would be reflected in the supply curve. Why would I tell you that the answer to this question is true? (And no, it's not simply to answer the question for you.) A 3. Categorize the following costs incurred by a marble producing firm as either FIXED or VARIABLE. WRITE OUT FIXED or VARIABLE on your answer sheet. (A) annual depreciation calculated for the operating machines such as the vats and cutting devices (B) the salary of the manager, who oversees the production process, and is employed year-round. (C) wages paid to workers who work the assembly lines to make the marbles (D) the amount and cost of silica sand and soda ash, the natural economic resources, needed to make the glass to make the marbles (E) the amount and cost of natural gas needed to heat the glass Rule F. Breathe. Part B. 1. When the price of bubblegum is $0.50, the Qd is 400 packs per day. When the price falls to $0.40, the Qd increases to 600. Given this information, you know that the elasticity of demand for bubble gum is (numerical figure) which means SHOW YOUR WORK using the midpoints formula. 2. When a bookstore sells cookie cook books at $15.00 each, they generally sell 70 per month during the months before Christmas. If they lower the price to $7.00 each, they sell 90. Given this, we know that the elasticity of demand for cookie cook books is (numerical figure) which means the bookstore should price to Total Revenue. SHOW YOUR WORK using the midpoints formula